macro economics chapter 3

an improvement in production technology will

shift the supply curve to the right

a leftward shift of a product supply curve might be caused by

some firms leaving an industry

in 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. this can best be explained by saying that oil and natural gas are

substitute goods, and the higher price for oil increased the demand for natural gas

other things equal, if the price of a key resource used to produce product X falls, the

supply curve of product X will shift to the right

other things equal, which of the following might shift the demand curve for gasoline to the left?

the development of a low-cost electric automobile

according to the concept of diminishing marginal utility, consumers will purchase more of a good when the price falls because

the marginal benefit of additional units of the good now outweigh the marginal cost

at the point where the demand and supply curves for a product intersect,

the quantity that consumers want to purchase and the amount producers choose to sell are the same

if the demand curve for product B shifts to the right as the price of product A declines, then

A & B are complementary goods

an economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. this prediction assumes that

bicycles are normal goods

assume in a competitive market that price is initially below the equilibrium level. We can predict that price will

increase, quantity demanded will decrease, and quantity supplied will increase

refer to the diagram. A shortage of 160 units would be encountered if price was

$0.50

refer to the diagram. The equilibrium price and quantity in this market will be

$1.00 and 200

refer to the diagram. A surplus of 160 units would be encountered if the price was

$1.60

refer to the diagram. If this is a competitive market, price and quantity will move toward

$40 and 150, respectively

in the past few years, the demand for donuts has greatly increased. this increase in demand might best be explained by

a change in buyers taste

which of the following will not cause the demand for product K to change?

a change in price for product K

If two goods are complements:

a decrease in the price of one will increase the demand for the other

because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates the

amount of oranges that will be available at various prices has declined

which of the following will cause the demand curve for product A to shift to the left?

an increase in money income if A is an inferior good

a recent study found that an increase in the federal tax on beer (which would increase the price of beer) would reduce the demand for marijuana. Based on this information we can conclude that

beer and marijuana are complementary goods

a firm's supply curve is upsloping because:

beyond some point the production costs of additional units of output will rise

the rationing function of prices refers to the

capacity of a competitive market to equalize quantity demanded and quantity supplied

blu-ray players and blu-ray discs are:

complementary goods

the relationship between quantity supplied and price is _____, and the relationship between quantity demanded and price is _____.

direct, inverse

a market is in equilibrium

if the amount producers want to sell is equal to the amount consumers want to buy

a demand curve

indicates the quantity demanded at each price in a series of prices

if there is a surplus of a product, its price

is above the equilibrium level

a market

is an institution that brings together buyers and sellers

refer to the diagram. A decrease in quantity demanded is depicted by a

move from point y to point x

the law of demand states that, other things equal:

price and quantity demanded are inversely related

the supply curve shows the relationship between:

price and quantity supplied

suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops, then we would expect

the supply to increase as farmers plant more corn

at the equilibrium price,

there are no pressures on price to either rise or fall

which of the following is most likely to be inferior goods?

used clothing

increasing marginal cost of production explains

why the supply curve is upsloping