AP Micro-Economics Unit 4

If the prices of CD's falls......

The demand curve for CDs will not shift There will be a movement along the demand curve for CDs

If the price of salsa rises, how does the increase in the price of salsa affect the supply of salsa?

There is no change to the supply of salsa but the quantity supplied decreases

When is quantity a mystery guest?

When supply and demand move in opposite directions

What does the Law of Market Forces state?

When there is a shortage, the price rises. When there is a surplus, the price falls.

Other things remaining the same, the quantity of a good of service demanded will increase if the price of the good or service......

falls

Suppose a medical study reveals new benefits to eating beef, and at the same time feeding cows becomes cheaper. The equilibrium quantity of beef will....

increases

An increase in the number of producers of bird seed _______ the supply of bird seed and shifts the supply curve of bird seed _______.

increases; rightward

Teenagers demanded more soda than other age groups. If the number of teenagers increases, everything else remaining the same....

market demand for soda increases

"Other things remaining the same, if the price of a good rises, the quantity supplied of the good increases." This sentence describes a....

movement along a supply curve

The impact of an increase in the price of a particular good is illustrated as a...

movement upward and to the left along its demand curve

For simultaneous shifts, what does the supply curve do to price and quantity?

moves them in opposite directions

For simultaneous shifts, what does the demand curve do to price and quantity?

moves them in the same direction

When is price a mystery guest?

only if supply and demand move in same direction

Changes in which of the following factors does NOT shift the demand curve?

price of good

When moving along the demand curve, what changes?

price of good

Suppose that at a price of $48 dollars per ticket, Universal Studios sells 730,000 tickets to its annual Halloween Horror Nights event. The figure of 730,000 is the......

quantity of tickets to Halloween Horror Nights demanded

Suppose that the price of lettuce used to produce tacos increases. As a result, the equilibrium price of a taco ________ and the equilibrium quantity ________.

rises; decreases

The phrase "change in demand" most directly implies a....

shift in the demand curve

If the number of sellers decreases, the the supply curve _______ and the supply _________.

shifts leftward; decreases

Iceberg and romaine are two different types of lettuce. For most consumers, iceberg and romaine are....

substitutes

Market demand curves are obtained by....

summing the quantities every consumer is willing to buy at each different price

The law of supply results primarily from the fact that....

suppliers have an incentive to use their resources in the way that brings the biggest return

If consumers preference for a good increases, then....

the demand curve shifts rightward

In a supply schedule, which of the following changes?

the price of a good

An increase in the productivity of producing jeans results in....

the supply of jeans increasing

Which of the following represents a quantity demanded of pies?

2 pies per week at $5 each

What must one look for when concerned with a change in QD or QS? What does it stand for?

T = Time A = Amount P = Price

Supply Curve Changes due to the T.I.E.S. System. What does it stand for?

T = Trends I = Inputs E = Expectations S = Sellers

Which results in a rightward shift of the supply curve of rutabagas?

A fall in the price of fertilizer used to grow rutabagas

An increase in the number of pineapple growers results in....

An increase in the supply of pineapples, and a rightward shift in the supply curve.

Which of the following helps explain why the law of supply exists? A) Larger Outputs result in lower cost of production B) Larger outputs results in higher cost of production C) The costs of production remain constant

B) Larger outputs results in higher cost of production

Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are....

Complements

What does the law of demand state?

If price rises, Quantity Demanded falls. If price decreases, Quantity Demanded rises.

What does the law of supply state?

If price of good rises, quantity supplied increases. If price of good falls, quantity supplied decreases.

"During 2005, the higher price of gasoline led to a decrease in demand for gasoline." This statement is....

Incorrect, because as price increases, the quantity demanded decreases, not the demand

What is the only thing that can change Quantity Demanded?

Price

Pizza and Tacos are substitutes, and the price of pizza increases. Which of the following correctly indicates what happens?

Quantity of pizza demanded decreases and the demand for tacos increases

Demand Curve Changes due to the S.E.P.T.I.C. System. What does it stand for?

S = Substitutes E = Expectations P = People T = Trends I = Income C = Complements

What happens to demand in terms of complements?

The demand of a good increases if price of its complements falls; the demand of a good decreases if price of its complement falls.

What happens to demand in terms of substitutes?

The demand of a good increases if price of its substitutes falls; the demand of a good decreases if price of its substitute rises.

What happens to supply in terms of complements?

The demand of a good increases if supply of its complements falls; the demand of a good decreases if supply of its complement falls.

What happens to supply in terms of substitutes?

The demand of a good increases if supply of its substitutes falls; the demand of a good decreases if supply of its substitute rises.

For consumers, taco chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of the taco chips?

The equilibrium price of taco chips falls and the equilibrium quantity decreases

If the demand for a good increases when peoples incomes increase....

The good is a normal good

In stores, it is common to find products marked as "On Sale" at a lower than usual price. What explains behavior?

The law of demand is being used to increase the quantity demanded

The law of demand refers to how.....

The quantity demanded changes when the price of the good changes

The "law of demand' indicates that if the University of Maine increases the tuition, all other things remaining the same.....

The quantity of classes demanded will decreases at the University

Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?

The supply decreases so that the supply curve shifts leftward

What is the best explanation for why the price of gasoline increases during the summer months?

There is increased driving by families going on vacation

To be part of the supply for a good, a producer must be...

both willing ad able to supply the good

One reason the demand for laptop computers might increase is a....

change in preference as laptops have become more portable, with faster processors and larger hard-drives.

when demand increases.....

consumers are willing to buy more at any price

Advances in productivity increases supply because they.....

decrease cost of production

As buyers incomes decrease.....

demand for inferior good increase

Candy makers accurately anticipate the demand for candy to increase during Halloween so that the supply and demand will be about the same amount. As a result, the price of candy ___________ and the quantity _________.

does not change; increases