Supply and Demand Theory

The demand curve shows the relationship between the price of a good and the quantity demanded, with all other factors held constant. One of those other factors is household income. If the average household income increases or decreases, the result is a _____ __ ___ ______ _____

Shift of the Demand Curve

A decrease in average income causes a leftward _____ __the demand curve; therefore, you may conclude that sedans are a ______ good.

Shift of, normal

in San Francisco, where there are over a thousand burger joints at any given moment. Suppose the price of ground beef, a major ingredient in hamburgers, suddenly increases. Supply Decreases Supply Increases Demand Increases Demand Decreases

Supply Decreases

The following graph shows the market for pianos in 2008. Between 2008 and 2009, the equilibrium price of pianos remained constant, but the equilibrium quantity of pianos increased. From this, you can conclude that between 2008 and 2009, the supply of pianos _________ , and the demand for pianos_________ .

increased, increased

Suppose that the price of a sedan increases from $20,000 to $25,000. This would cause the ________ ________ of sedans to increase, which is reflected on the graph by a ________ ______the supply curve.

quantity supplied, movement along

Following a technological improvement—for example, an increase in the speed with which robots can attach bolts to cars—there is a _________ _____ __the supply curve because the technological improvement makes cars ____ _________ __ _____

rightward shift of, less expensive to build

A graphical representation of the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices Quantity Demanded Demand Curve Demand Schedule Law of Demand

Demand Curve

A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices Quantity Demanded Demand Curve Demand Schedule Law of Demand

Demand Schedule

Even though I was willing to pay up to $79 for a watch, I bought a watch for only $71. Consumers' Surplus Producer's Surplus Neither

Consumers' Surplus

Consumers' Surplus is above the __________, and beneath the ______ _____.

Equilibrium, Demand curve

Producers' Surplus is below the __________, and above the ______ _____.

Equilibrium, Supply Curve

The claim that, other things being equal, the quantity demanded of a good falls when the price of that good rises Quantity Demanded Demand Curve Demand Schedule Law of Demand

Law of Demand

Suppose that the price of a sedan increased from $10,000 to $15,000. This would cause a ________ _____ the demand curve

Movement Along

When the price changes, but all other determinants of the quantity demanded remain constant, the result is a ________ ______ the demand curve.

Movement along

I paid $45 for a jersey sweater last week. This week, the same store is selling sweaters for $38. Consumers' Surplus Producer's Surplus Neither

Neither

I sold a used textbook for $39, even though I was willing to go as low as $31 in order to sell it. Consumers' Surplus Producer's Surplus Neither

Producer's Surplus

The amount of a good that buyers are willing and able to purchase at a given price Quantity Demanded Demand Curve Demand Schedule Law of Demand

Quantity Demanded

Suppose that the price of a gallon of gas falls from $4 to $3. Because sedans and gasoline are ___________ , a decrease in the price of a gallon of gas shifts the demand curve for sedans to the _____ .

complements, right

Your coworker Kate is really concerned about a project that she has just been assigned. She is in charge of analyzing and determining conditions in the market for televisions from an extensive sales report. If Kate's boss is interested in a graphical presentation of the relationship between the price and quantity of televisions demanded, you would advise your coworker to construct a ______ _____ using the data provided. However, if Kate's boss is more interested in the detailed numbers used to construct this visual representation, you would instead advise your coworker that a ______ ________ would be more appropriate.

demand curve, demand schedule

The voucher program causes the population of New York City to increase. With more donut consumers in New York City, the demand for donuts _________, which shifts the demand curve to the _____.

increases, right