micro ch 3

If Ramen Noodles are an inferior good, then a fall in income should lead to _____ in the demand for Ramen Noodles

increase

Which of the following factors will lead to an increase in supply?

A decrease in the cost of inputs to the production process. A technological advance that lowers production costs.

Which of the following factors will lead to an increase in the demand for a good?

An expectation of higher prices in the futureA decrease in the price of a complement

A shift in the entire demand curve is considered

change in demand

A movement along the demand curve is considered

a change in the quantity demanded

A change in quantity demanded is represented by Multiple choice question.

a movement along the demand curve.

Given that flour is an important input to bread, an increase in the price of flour should lead to: Multiple select question.

an increase in the price of bread.a decrease in the quantity of bread bought and sold in the market.

Two goods are complements if

an increase in the price of one good, leads to a decrease (leftward shift) in the demand for the other.

Two goods are substitutes if

an increase in the price of one good, leads to an increase (rightward shift) in the demand for the other.

The entire group of buyers and sellers of a particular good or service makes up:

market

A maximum allowable price specified by law is a

price ceiling

Buyer's surplus is Multiple choice question.

the difference between a buyer's reservation price and the price the buyer actually pays.

Seller's surplus is:

the difference between the price the seller receives and the seller's reservation price.

he socially optimal quantity is

the quantity of a good that maximizes the total economic surplus that results from producing and consuming the good

True or false: The socially optimal quantity is that level for which the marginal cost and marginal benefit of the good are the same

true

a demand curve shows the quantity of a good that buyers

wish to buy at every price