ECO 231 - Quiz 1
Refer to Table 4-11. The equilibrium price and quantity, respectively, are
$6 and 30 units
The market demand curve
represents the sum of the quantities demanded by all the buyers at each price of the good
An increase in quantity demand
results in a movement downward and to the right along the demand curve
The two words most often used by economists are
supply and demand
Refer to Figure 4-17. At a price of
$7, there is a surplus of 4 units.
The following table contains a demand schedule for a good. Price Quantity Demanded $10 100 $20 Q1 If the law of demand applies to this good, then Q1 could be
0
Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $4 is
14 units
The following table contains a supply schedule for a good. Price Quantity Supplied $10 100 $20 Q1 If the law of supply applies to this good then Q1 could be
150
Refer to Table 4-10. If Alpine Springs and Dew Good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?
200 cases
Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by
5 units
Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?
A tax was placed on cigarettes
Which of the following might cause the supply curve for an inferior good to shift to the right?
An improvement in production technology that makes production of the good more profitable
Refer to Table 4-6. Which supply schedules obey the law of supply?
Firm B's and Firm D's only
Refer to Table 4-3. Whose demand does not obey the law of demand?
Grover's
In a competitive market, the price of a product
None of the above
In a market economy, supply and demand are important because they
Play a critical role in the allocation of the economy's scares resources, determine how much of each good gets produced, can be used to predict the impact on the economy of various events and policies
Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. If the warning labels are successful, we could illustrate the plan as producing a movement from
Point A to Point B in Panel 1
Refer to Figure 4-14. Which of the following best describes the movement from E1 to E2?
a decrease in supply
Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?
a decrease in the price of cotton
Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses?
a decrease in the price of custom wooden sleigh bed frames
When we move along a given supply curve,
all nonprice determinants of supply are held constant
Refer to Figure 4-11. The movement from point A to point B on the graph is called
an increase in the quantity supplied
In competitive markets, buyers
and sellers are price takers
A market includes
both buyers and sellers
In a market economy, supply, and demand determine
both the quantity of each good produced and the price at which it is sold
Refer to Figure 4-10. The movement from Point A to Point B represents a(n)
decrease in the quantity supplied
The unique point at which the supply and demand curves intersect is called
equilibrium
The law of demand states that, other things equal, when the price of a good
falls, the quantity demanded for the good rises
Whish of the following is an example of a market?
gas station, garage sale, barber shop
A movement downward and to the right along the demand curve is called a(n)
increase in quantity demanded
Refer to Figure Above. The movement from point A to point B on the graph shows a(n)
increase in quantity demanded
A movement upward and to the right along the supply curve is called a(n)
increase in quantity supplied
A rightward shift of a supply curve is called a(n)
increase in supply
Equilibrium price must increase when demand
increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the
law of demand
When a surplus exists in a market, sellers
lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated
A group of buyers and sellers of a particular good or service is called a(n)
market
The sum of all the individual supply curves for a product is called
market supply
A competitive market is a market in which
no individual buyer or seller has any significant impact on the market price
The highest form of competition is called
perfect competition
The law of demand states that, other things equal, an increase in
price causes quantity demanded to decrease
The law of supply state that, other things equal, when the price of a good
rises, the quantity supplied of the good rises
The quantity supplied of a good is the amount that
sellers are willing and able to sell
When quantity demanded increase at every possible price, the demand curve has
shifted to the right
An example of a perfectly competitive market would be the market for
soybeans
Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a
surplus to exist and the market price of chocolate-dipped strawberries to decrease
Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at
the equilibrium price but not above or below
A movement along the supply curve might be caused by a change in
the price of the good service that is being supplied
If the price of a good is low,
the quantity supplied of the good could be zero
The demand for a good or service is determined by
those who buy the good or service
The supply of a good or service is determined by
those who sell the good or service
The quantity demanded of a good is the amount that buyers are
willing and able to purchase