Macro econ ch 4 all
Lobsters are plentiful and easy to catch in August but scarce and difficult to catch in November. In addition, vacationers shift the demand for lobsters further to the right in August than in any other month. Given this information, we know that _________ is/are higher in August than in other months. A. both supply and demand. B. only demand. C. neither supply nor demand. D. only supply.
both supply and demand.
The concept of diminishing marginal benefits means that __________. A. the more of a good that you consume, the lower is your overall benefit from that good. B. each additional unit consumed is worth less to you than the previous one. C. as you consume more of a good, your willingness to pay for that good increases faster than the benefit you receive. D. each additional unit consumed is worth more to you than the previous one, but the additional benefit grows at a diminishing rate.
each additional unit consumed is worth less to you than the previous one.
Market demand is derived by __________. A. dividing each buyer's demand by the total number of consumers in the market. B. fixing the quantity and adding up the prices that each buyer pays. C. fixing the price and adding up the quantities that each buyer demands. D. adding up both the prices each buyer pays and the quantities that each buyer demands.
fixing the price and adding up the quantities that each buyer demands.
The concept of diminishing marginal benefits _________ for goods that you like a lot. a. holds true b. does not exist
holds true
The competitive equilibrium price equates A. quantity supplied to quantity demanded. B. supply to demand. C. price to quantity supplied. D. price to quantity demanded.
quantity supplied to quantity demanded.
The market supply curve is the (sum, product) of all the supply curves of potential producers and would be graphed to the (left, right) of the individual curves.
sum, right
Holding all else constant, if the number of cell phone manufacturers suddenly decreased due to increased regulations, then A. supply would shift rightwards, equilibrium price would decrease, and equilibrium quantity would increase. B. supply would shift rightwards, equilibrium price would increase, and equilibrium quantity would decrease. C. supply would shift leftwards, equilibrium price would increase, and equilibrium quantity would decrease. D. supply would shift leftwards, equilibrium price would decrease, and equilibrium quantity would decrease.
supply would shift leftwards, equilibrium price would increase, and equilibrium quantity would decrease.
Suppose you have a flashlight that takes three batteries to power it. If you buy the batteries one at a time, for which purchase will diminishing benefits set in? A. When you buy the first battery. B. When you buy the second battery. C. When you buy the third battery. D. When you buy the fourth battery.
the forth battery
If the government sets a minimum wage for seasonal workers, then the supply curve for sparkling wine would __________. A. increase (Shift right) B. remain unchanged. c. decrease (shift left)
decrease (shift left)
If the number of sellers of sparkling wine decreases significantly, then the supply curve for sparkling wine would __________. A. increase (shift right) B. decrease (shift left) C. remain unchanged.
decrease (shift left)
If widespread unemployment leads to a drop in incomes, then the demand for the Toyota Rav4 SUV would __________. A. increase (shift right) B. remain unchanged. C. decrease ( shift left)
decrease (shift left)
For a trade to take place, a buyer's willingness to pay must be ____________. A. higher than the seller's willingness to accept. B. equal to the seller's willingness to accept. C. lower than the seller's willingness to accept. D. A and B only. E. All of the above.
A and B only.
What is meant by holding all else equal and how is this concept used when discussing movements along the demand curve? A. everything else in the economy is held constant, including the price of the good. B. All variables in the model are set to equal values. C. All variables that can affect the demand for the good are held constant. D. All of the above.
All variables that can affect the demand for the good are held constant.
If the number of people over the age of 16 in the country increased significantly, then the demand for the Toyota Rav4 SUV would __________. A. remain unchanged. B. increase (shift right) C. decrease (shift left)
B. increase (shift right)
Two airlines serve the route between Tampa and Houston. What will happen to one airline if the other one raises its prices? A. There will be a movement upward, to the left, along its initial demand curve. B. Its demand curve will shift to the left. C. Its demand curve will shift to the right. D. There will be a movement downward, to the right, along its initial demand curve.
Its demand curve will shift to the right.
A supply curve has a _________ slope due to the Law of Supply. The Law of Supply states that supplies ___________ as price increases.
Positive, increase
Which would be the correct sequence of events in the speedboat industry if waterway access was improved and, at the same time, a lighter polymer became available that increased production efficiency? A. Supply would shift left, demand would shift right, equilibrium price would decrease, and equilibrium quantity would increase. B. Supply would shift left, demand would shift left, equilibrium price would be indeterminable, and equilibrium quantity would decrease. C. Supply would shift right, demand would shift left, equilibrium price would increase, and equilibrium quantity would be indeterminable. D. Supply would shift right, demand would shift right, equilibrium price would be indeterminable, and equilibrium quantity would increase.
Supply would shift right, demand would shift right, equilibrium price would be indeterminable, and equilibrium quantity would increase.
What does it mean to say that we are running out of "cheap oil"? A. That oil reserves are becoming more expensive to find and extract over time. B. That world demand for oil is declining, which will raise the price of oil in the future. C. That there are declining reserves of low-quality oil, but there is still plenty of high-quality oil remaining. D. That we will soon deplete all the world's oil reserves, which will cause the price of oil to increase significantly.
That oil reserves are becoming more expensive to find and extract over time.
How would an increase in supply affect the equilibrium price in a market? A. The equilibrium price increases. B. The equilibrium price decreases. C. The equilibrium price would remain the same. D. More information is needed. It may increase, decrease, or remain the same.
The equilibrium price decreases.
How would the equilibrium price in a market be affected if there were a large increase in supply and a small increase in demand? A. The equilibrium price decreases. B. The equilibrium price would remain the same. C. The equilibrium price increases. D. More information is needed. It may increase, decrease, or remain the same.
The equilibrium price decreases.
How would the equilibrium price in a market be affected if there were a large decrease in supply and a small decrease in demand? A. The equilibrium price increases. B. The equilibrium price would remain the same. C. The equilibrium price decreases. D. More information is needed. It may increase, decrease, or remain the same.
The equilibrium price increases.
What does this imply for the price of oil in the future? A. The demand for oil will decrease, which will lead to higher prices in the future. B. The supply of oil will increase, which will lead to lower prices in the future. C. The supply of oil will decrease, which will lead to higher prices in the future. D. The demand for oil will increase, which will lead to lower prices in the future.
The supply of oil will decrease, which will lead to higher prices in the future.
Land in Sonoma, California, can be used to either grow grapes for pinot noir wine or to grow Gravenstein apples. Given this information, what is the relationship between pinot noir wine and Gravenstein apples? A. They are substitutes in consumption. B. They share a common input. C. They are complements in consumption. D. They are completely unrelated.
They share a common input.
Holding all else equal, if the price of a digital camera rises, then we can expect A. a decrease in the quantity demanded of digital cameras. B. an increase in the quantity demanded of digital cameras. C. an increase in the demand for digital cameras. D. a decrease in the demand for digital cameras.
a decrease in the QUANTITY demanded of digital cameras.
All of the following would cause a shift in the supply curve for orange juice, except A. a freeze over all of Florida for three nights in a row. B. tax credits for citrus farmers. C. a new medical discovery about the benefits of citrus. D. new machinery that speeds up the picking process.
a new medical discovery about the benefits of citrus.
If the demand for pinot noir suddenly shifts sharply to the right, we would expect to see (no change, an increase, a decrease) in the demand for land in Sonoma, which would (increase, no impact, decrease) the equilibrium price of land.
an increase, increase
Willingness to accept is the (lowest, highest) price that a seller is willing to get paid to sell an extra unit of a good. Willingness to accept is the same as the (marginal, fixed) cost of production.
lowest, marginal
A competitive market will A. create excess demand because wants exceed needs. B. move towards equilibrium because producers set the prices. C. create excess supply because producers want profits. D. move towards equilibrium quantity because both producers and consumers act in their own best interest.
move towards equilibrium quantity because both producers and consumers act in their own best interest.
A demand curve has a (negative, positve) slope due to the Law of Demand. The Law of Demand is based off of a consumer's willingness to pay (more, less) as marginal units are consumed.
negative, less
We make the assumption of holding all else equal when considering demand curves since we want to focus on the changes in the quantity demanded that result from changes in ________________ a. the price of goods and incomes b. only the price of the good c. only the price of consumers incomes
only the price of the good
Which change causes a movement along the demand curve? A. number and scale of buyers B. tastes and preferences C. buyer's beliefs about the future D. price of the good itself
price of the good itself
An aggregated demand curve is created by summing the (quantity demanded at each price, prices for each quantity demanded) on the individual demand ( curves, schedules).
quantity demanded at each price, curves
The concept of diminishing marginal benefits states that A. the more you consume of a good, your willingness to pay for an additional unit declines. B. the more you consume of a good, the less benefit you receive. C. the more you pay for a good, the less benefit you receive. D. the more you pay for a good, the greater the benefit you receive.
the more you consume of a good, your willingness to pay for an additional unit declines.
The lowest price that a seller is willing to receive to sell an extra unit of a good is called (willingness to exchange, willingness to pay, willingness to accept) , while the highest price that a buyer is willing to pay for an extra unit of a good is called (willingness to exchange, willingness to pay, willingness to accept).
willingness to accept, willingness to pay
Suppose one of your friends offered the following argument: A rightward shift in demand will cause an increase in price. The increase in price will cause a rightward shift of the supply curve, which will lead to an offsetting decrease in price. Therefore, it is impossible to tell what effect an increase in demand will have on price. Do you agree with your friend? A. Yes, since the shift in demand that raises the price must cause an offsetting shift in supply, we cannot know the impact on price. B. Yes, any time both the supply and demand curves shift, it becomes impossible to accurately determine the impact on the price of a good. C. No, the increase in price will not cause a shift of the supply curve. D. No, the offsetting supply shift caused by the higher price will not be as large as the demand shift, so we know the price will rise some.
No, the increase in price will not cause a shift of the supply curve.
Does the shape of the market demand curve differ from the shape of an individual demand curve? A. No, they both tend to be upward-sloping curves. B. No, they both tend to be downward-sloping curves. C. Yes, individual demand curves tend to be upward-sloping, while market demand curves are horizontal. D. Yes, individual demand curves tend to be downward-sloping, while market demand curves are upward-sloping.
No, they both tend to be downward-sloping curves.
The Law of Supply states that, in most cases, the quantity supplied of a good ___________ when the price of the good rises. This means we would expect a typical supply curve to be___________. A. rises; upward-sloping. B. falls; downward-sloping. C. falls; upward-sloping. D. rises; downward-sloping.
rises; upward-sloping.