Economics - Chapter 3 HW

Which of the following is a market transaction?

A college student purchases a laptop computer.

If bagels and doughnuts are substitutes, then a decrease in the price of doughnuts will result in

A decrease in the demand for bagels.

Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of perfume?

A decrease in the price of perfume.

Ceteris paribus, if the price of a digital camera rises, then we can expect

A decrease in the quantity demanded of digital cameras.

A lower quantity demanded of a good reflects, ceteris paribus,

A higher price of the good.

Which of the following would not cause the market supply of cell phones to change?

A reduction in the demand for cell phones causes the price to fall.

Which of the following events would cause a rightward shift in the market supply curve for automobiles?

A technological improvement that reduces the cost of production.

Ceteris paribus, which of the following would generally cause an increase in the demand curve for new automobiles?

An increase in consumers' income.

Ceteris paribus, which of the following is most likely to cause a decrease in the supply of skateboards?

An increase in the cost of materials used to produce skateboards.

Assume that pencils and pens are substitutes. If the price of pencils rises, then we will see

An increase in the demand for pens.

Peanut butter and jelly are complements. A decrease in the price of one will result in

An increase in the demand for the other.

Ceteris paribus, which of the following would you expect to have no effect on the demand curve for new automobiles?

An increase in the price of new automobiles.

Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume?

An increase in the price of perfume.

Which of the following is a determinant of market supply?

Available technology.

Which of the following is purchased in a product market?

Cell phone service

A leftward shift of the market demand curve for HDTVs, ceteris paribus, causes equilibrium price to

Decrease and quantity to decrease.

Assume a series of forest fires reduces the supply of lumber, which is an input in the production of wooden bats. Baseballs and wooden bats are complements. If the price of wooden bats increases, we can expect the

Demand for baseballs to decrease.

According to the law of demand, a demand curve

Has a negative slope.

Ceteris paribus means

Holding everything constant except for the variables you are interested in examining.

According to the law of demand, during a given period of time, the quantity of a good demanded

Increases as its price falls, ceteris paribus.

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded

Means that price has changed and there is movement along the demand curve.

At the equilibrium price, there are

No shortages or surpluses.

The most desired goods or services that are given up when a choice is made are called the

Opportunity cost.

A ballet performance had many empty seats. This implies that the

Price of the tickets must have been above the equilibrium price.

If the quantity demanded of a good is greater than the quantity supplied of the good at the current price, then

Price will increase until it reaches the equilibrium price.

Which of the following is not held constant along a given supply curve for a good?

Price.

As a result of a shortage,

Producers increase output and raise price.

When a surplus exists for a product,

Producers reduce the level of output and reduce price.

A market in which final goods and services are exchanged is a

Product market.

A change in the price of a good

Results in a change in quantity supplied.

A shift in supply is defined as a change in

Supply because of a change in a determinant of supply.

The law of supply implies that

Supply curves are upward-sloping to the right.

If there is a surplus at a given price, then

That price is greater than the equilibrium price.

If there is a shortage at a given price, then

That price is less than the equilibrium price.

A buyer is said to have a demand for a good only when

The buyer is both willing and able to purchase the good.

If there are only two airlines that fly between Dallas and New Orleans, what will happen in the market for one airline if the other one goes out of business?

The demand curve will shift to the right.

Which of the following is purchased in a factor market?

The labor of a state university professor

The equilibrium price in a market is found where

The market supply curve intersects the market demand curve.

Market demand is determined by all of the following except

The number of potential sellers.

Tickets to a sporting event go on sale and sell out almost instantly. This suggests that

The price for the tickets is below the equilibrium price.

Which of the following can change without shifting demand, ceteris paribus?

The price of the good itself.

If corn and wheat are alternative pursuits for a farmer, a change in the supply of corn will take place when, ceteris paribus,

The price of wheat changes.

Which of the following is a determinant of supply?

The prices of the factors of production.

A market is said to be in equilibrium when

The quantity demanded equals the quantity supplied.

Assume that steel is used to produce monkey wrenches. Ceteris paribus, if the price of steel rises, then

The supply curve for monkey wrenches will shift to the left.

The term market mechanism refers to

The use of market prices and sales to determine resource allocation.

Individual consumers supply ____ and purchase ____.

factors of production; final goods and services