Econ Chapter 3

When one of the determinants of demand changes, that will result in:

a shift of the demand curve.

A factor that can shift a demand curve to the left for an inferior good is a(n):

decrease in population.

The law of supply says:

producers are willing to offer more for sale if the price increases.

According to the law of supply, individuals will supply more of a good when:

the price rises.

Prices perform which of the following functions?

All answer choices are correct.

Which of the following would not be a market transaction?

payment made to a disaster victim

If the local pizzeria has only two buyers, Jake and Sue, for its calzones, what is the market demand for calzones at each of the prices listed? QJ is the quantity demanded at each price below by Jake, and QS is the quantity demanded at each price below by Sue. Price QJ QS 5 4 2 10 3 1 15 2 0 20 1 0

6, 4, 2, 1

Ben likes carrots less today than he did yesterday.

Ben is now willing to pay less than before for carrots.

Prices:

allow sellers to determine what goods to sell, help buyers find possible substitute goods, and contain information useful for all people involved in a transaction.

A market will:

always trend towards equilibrium.

College classes and college textbooks are:

complementary goods.

A decrease in the quantity supplied of iPods is caused by a(n):

drop in the price of iPods.

Determinants of supply include all of the following except:

income.

A(n) _____ is an institution that brings buyers and sellers together so they can interact and transact with each other.

market

In moving along a supply curve, which of the following is not held constant?

market price of the good.

In citing the ceteris paribus condition for the law of demand, the only two variables that change are:

the product's price and the quantity demanded for the product.

"Demand" refers to:

the products buyers are willing and able to purchase at various prices in a given period of time.

The concept of demand is:

the quantities of a good or a service that people will buy at various prices.

If the price of HDTVs falls:

the quantity supplied of HDTVs declines.

An increase in the supply of popcorn indicates that the producers of popcorn are willing to sell _____ at all prices, and the supply curve for popcorn shifts _____________. A) less popcorn; rightward

more popcorn; rightward

A market exists when:

people exchange money for goods and services.

In a market economy, there is a(n) _____ relationship between price and quantity supplied.

positive

The market economy is often called the price system because:

prices provide information for both buyers and sellers.

According to the law of supply, as price increases,

quantity supplied will rise.

A graphical representation of how much a seller would be willing and able to bring to the market at various prices is known as the:

supply curve.

Labor costs increase at General Foods cereal plants:

supply decreases; quantity supplied decreases; price increases.

If more auto manufacturers start producing hybrid cars:

supply increases; quantity supplied increases; price decreases.

The state of Florida was experiencing a period of drought. The farmers were anticipating an increase in the cost of growing oranges. This would have caused a decrease in the:

supply of oranges.

If the Surgeon General announced that wearing baseball caps will eliminate dandruff, then, ceteris paribus:

the equilibrium price of baseball caps would increase.

Gasoline is produced from crude oil. All things equal, if the supply of crude oil falls:

the equilibrium price of gasoline will increase and the equilibrium quantity will decrease.

When economists refer to a "Market Demand" curve, we know that it represents:

the horizontal summation of individual demand curves.

An increase in price will lead to an increase in quantity supplied. This statement is:

the law of supply.

A technological advance causes:

the supply curve to shift to the right.

A decrease in demand means that:

the demand curve has shifted to the left.

The basic proposition of the law of demand is that:

as the price of a good rises, less of it is demanded.

"Supply" refers to the:

amount of a product sellers are willing and able to sell at various prices.

Which is the most likely effect of an increase in the price of computer software upon the market for laptop computers?

decreased equilibrium price and decreased equilibrium quantity

There are more baby boomers in the population than there are people already retired. Once the baby boomers start to retire, what happens to the market for retirement homes?

demand increases; quantity demanded increases; price increases

A demand curve represents a(n):

indirect relationship between price and quantity demanded.

An item whose demand rises as people's incomes fall is known as a(n) ________ good.

inferior.