ECONOMICS

To determine whether a particular good is a normal good, a luxury good, or an inferior good, you would want to observe what happens to demand for the good when __________ changes.

income

A higher price simultaneously __________ the quantity supplied and __________ the quantity demanded, thus reducing the amount of excess __________.

increases; decreases; demand

Inferior goods are characterized by _____ demand as a result of increased income

lower

How might a government cause a demand shift to the right?

By requiring consumers to purchase certain products

Excess demand generally causes prices to go down.

False

When a demand curve shifts to the right,

demand increases, equilibrium price increases, and equilibrium quantity increases.

Movies delivered over the Internet might have what effect on movie theaters?

A demand shift to the left.

Refer to the figure. Which of the following is true?

A. At a price of $10, there would be neither excess demand for nor excess supply of pizza. B. At a price of $8, there would be excess demand for pizza. C. At a price of $5, there would be neither excess demand for nor excess supply of pizza. D. At a price of $0.50, there would be excess supply of pizza. Answer is ;C. At a price of $5, there would be neither excess demand for nor excess supply of pizza.

Refer to the table. In this market, the equilibrium price occurs where quantity demanded and quantity supplied are both

A. greater than 50 but less than 80. B. greater than 80 but less than 100. C. greater than 100 but less than 120. D. greater than 120 Answer is ;greater than 80 but less than 100.

If financial aid were severely reduced, what would happen to the equilibrium quantity of education supplied by educational institutions?

The quantity supplied would fall.

Left to themselves, most markets will eventually reach market equilibrium.

True

After Hurricane Katrina, the supply curve for oil shifted to the left, and as a result

a new equilibrium price was reached.

Market equilibrium is the point where quantity supplied and __________ are reasonably in balance

quantity demanded

An increase in supply is shown graphically as a __________ shift of the supply curve, and as a result of an increase in supply, equilibrium price will

rightward; decrease

Higher interest rates can cause the demand curve for cars to

shift to the left.