Econ ch. 3

Increases and demand curve shifts rightward

If the price of a good is expected to rise in the future, the opportunity cost of buying now is lower than in the future and the demand...

Greater, rise

If there is a shortage of a good, the quantity demanded is ____ than the quantity supplied and the price will ____

Minimum supply price curve

In addition to showing the quantity that will be supplied at different prices, a supply curve is also a...

Yes if both the demand and the supply of the good increase by the same amount

Is it possible for the price of a good to stay the same while the quantity increases?

Market equilibrium

Neither buyers nor sellers can do business at a better price

Equilibrium price

Only at this price does price not change

Increases, increases

Pizza and hamburgers are substitutes for consumers. A rise in the price of pizza ______ the equilibrium price of a hamburger and _______ in the equilibrium quantity of hamburgers

Demand curve shifts

Prices rise/fall of: related goods, future prices, income, expected future income and credit, population, preferences

Demand

Relationship between the price of a good and the quantity demanded

The supply curve shifts

Rise/fall in: prices of factors of production, prices of related goods, expected future prices, number of suppliers, technology, the state of nature

Demand curve

Shows the relationship between the quantity demanded of a good and its price, everything else remaining the same

Supply curve

Shows the relationship between the quantity supplied and the price of the good

Rightward shift in the supply curve

Supply increases for any reason causes a...

Quantity of demand

The amount that consumers plan to buy during a given times period at a particular price

Quantity supplied

The amount that producers plan to sell during a given time period at a particular price

Lower quantity demanded

The higher the price of a good or service...

Decreases and creates movement along the demand curve for golf balls

The law of demand concludes that the rise in the price of a golf ball ______ the quantity demanded and ______

Money price of a good

The number of dollars that must be given up

Increase, decrease

The number of firms producing computer memory chips decreases. As a result, the price of memory chips ___ and the quantity of memory chips ___

Equilibrium price

The price at which the quantity demanded equals the quantity supplied. Determined by the intersection of the demand and supply curves

Supply of airplane trips derease

The price of jet fuel rises what is the effect on airplane trips....

Equilibrium quantity

The quantity bought and sold at the equilibrium price

Relative price

The ratio of one money price to another determined by the demand and supply of a good

Supply

The relationship between the quantity supplied and the price of the good

Complements

The rise in the price of gasoline decreases the demand for large cars which means gasoline and large cars are _______

Change in demand

A shift in the demand curve occurs when any factor that influences buying plans changes, other that the price of the good

Decreases, increases

A technological improvement lowers the cost of producing coffee. The technological improvement ____ the equilibrium price of a pound of coffee and _____ the equilibrium quantity of coffee

Law of supply

All other things remaining the same: the higher the price of a good, the greater is the quantity supplied and the lower the price of a good, the smaller is the quantity supplied

Law of demand

All other things remaining the same: the higher the price of a good, the smaller is the quantity demanded and the lower the price of a good , the greater is the quantity demanded

Increases supply and the supply curve shifts rightward

An advance in technology...

Rise

An increase in demand and a decrease in supply causes the equilibrium price to...

Increases demand and shifts the demand curve rightward

An increase in income for a normal good...

Decreases demand and shifts the demand curve leftward

An increase in income for an inferior good...

Increases demand and shifts the demand curve rightward

An increase in population...

Shifts supply curve rightward

An increase in supply...

Increase, rightward

An increase in the number of producers of gruel ______ the supple of gruel and shifts the supply curve of gruel ____

Increases supply and the supply curve shifts rightward

An increase in the number of suppliers...

Leftward, not at all

An increase in the price of the cheese used to produce pizza shifts the supply curve of pizza ______ and shifts the demand curve for pizza _______

Decreases supply and shifts the supply curve leftward

A rise in the price of a substitute in production...

increases demand and shifts the demand curve rightward

A rise in the price of substitutes...

Decreases and the supply curve shifts leftward

If the price is expected to rise in the future, the current supply...

Decreases supply and shifts the supply curve leftward

A rise in the price of a factor of production used to produce the good...

Increase in supply

A rightward shift of the supply curve which decreases P and increases Q

increases supply and the supply curve shifts rightward

A rise in the price of a complement in production...

Decreases demand and shifts the demand curve leftward

A rise in the price of a complement...

Change in the quantity supplied and movement along the demand curve

A change in the price of a good leads to...

Change in quantity demanded

A change in the price of the good or service leads to __________ and a movement along the demand curve.

Shifts supply curve leftward

A decrease in supply...

Law of supply

A fall in the price of a food leads producers to decrease the quantity of the good supplied. This statement reflects...

Substitution effect

A higher relative price raises the opportunity cost of buying a good, so people buy less of it

Income effect

A higher relative price reduces the amount of goods people can buy. Usually this effect decreases the amount people buy of the good that rose in price

Decrease in demand

A leftward shift of the demand curve which lowers P and decreases Q

Decrease in supply

A leftward shift of the supply curve which raises P and decreases Q

Competitive market

A market that has many buyers and sellers, so no single buyer or seller can influence the price

Increase in demand

A rightward shift of the demand curve which raises P and increases Q

Quantity supplied equals quantity demanded

If the market for Twinkies is in equilibrium, then...

Decrease in demand

Demand curve shifts leftward

Increase in demand

Demand curve shifts rightward

Demand, rightward

Demand for wheat rises and the quantity increases causes _____ curve to shift _____

Normal good

Demand increases when income increases for this kind of good

Increase

Expected future income increases or when credit is easy to obtain current demand might...

Decrease

Fewer people want to read less books causes the equilibrium quantity of books to...

Demand curve leftward

Fewer people want to read paper back books shifts the...

Increases supply and the supply curve shifts rightward

Good states of nature, such as good growing season for an agricultural good or cloudless days for solar energy plants...

Surplus

Happens at prices above the equilibrium price which causes the price to fall

Shortage

Happens at prices below the equilibrium price which causes the price to rise

It raises price and increases quantity

How does an unusually cold winter affect the equilibrium price and equilibrium quantity of antifreeze?

Increases and shifts the demand curve rightward

If people like a good more demand...

Change in supply and shift of the supply curve

When any factor that influences selling plans other than the price of the good changing there is...

Ambiguous

When both the demand and supply curves shift, the effect on the price or quantity can be determined, but without the information about the relative sizes of the shifts, the effect is...