Macro eco Ch 4 study guide
demand schedule
a table that shows the relationship between the price of a good and the quantity demanded
b
A change in expectations about the future price of wine (supply) a. Movement along b. Shift
b
A change in the expectations of consumers about their future income a. Movement along b. Shift
d
A decrease in quantity demanded is different from shifting the demand curve to the left because a decrease in quantity demanded a. is caused by a price decrease while a shift to the left is caused by a change in a nonprice determinant of demand. b. is caused by a change in a nonprice determinant of demand while a shift to the left is caused by a price increase. c. is caused by a change in a nonprice determinant of demand while a shift to the left is caused by a price decrease. d. is caused by a price increase while a shift to the left is caused by a change in a nonprice determinant of demand.
a
A decrease in the price of hot dogs (Demand) a. Movement along b. Shift
a
A decrease in the price of wine a. Movement along b. Shift
b
A graphical object showing the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices a. Quantity demanded b. Demand curve c. demand schedule d. law of demand
b
A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices a. Quantity Supplied b. Supply curve c. Supply schedule d. law of Supply
c
A group of pizza buyers and pizza sellers forms a(n) a. demand b. supply. c. market. d. economy.
shortage
A situation in which quantity demanded is greater than quantity supplied
surplus
A situation in which quantity supplied is greater than quantity demanded
c
A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices a. Quantity Supplied b. Supply curve c. Supply schedule d. law of Supply
c
A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices a. Quantity demanded b. Demand curve c. demand schedule d. law of demand
c
A very snowy winter in Boston will cause a. a movement upward and to the left along the demand curve for shovels. b. the demand for plow services to shift to the left. c. the demand curve for snow blowers to shift to the right. d. the price of ice melt to decrease.
b
An increase in the price of grapes (used in the production of wine) a. Movement along b. Shift
b
An increase in the price of soda (a complement for hot dogs) a. Movement along b. Shift
d
Assume the market for wheat is perfectly competitive. When one wheat buyer exits the market, a. the price of wheat does not change; but when one wheat seller exits the market, the price of wheat increases. b. the price of wheat decreases; when one wheat seller exits the market, the price of wheat increases. c. the price of wheat increases; when one wheat seller exits the market, the price of wheat decreases. d. the price of wheat does not change; when one wheat seller exits the market, the price of wheat does not change.
a
If Betty experiences an increase in her income, then we would expect Betty's demand for a. inferior goods to decrease. b. substitute goods to increase. c. complementary goods to decrease. d. normal goods to decrease.
c
Consider the market for coffee makers. If coffee becomes cheaper, consumption of coffee is found to reduce heart disease, the wages of workers in coffee maker manufacturing plants increases, and the price of plastic (an input for coffee makers) increases, the equilibrium price will a. could rise, fall, or remain unchanged. b. stay the same. c. rise. d. fall.
a
If Alice expects to earn a higher income next month, she may choose to a. shift her demand for clothes to the right. b. move downward and to the right along her current demand curve for clothes. c. buy fewer clothes this month. d. shift her demand for savings to the right.
a
If buyers and sellers in a certain market are price takers, then individually a. they must accept the price the market determines. b. there are very few buyers participating in this market. c. sellers are part of a monopoly market. d. hey have the ability to negotiate prices that are different from the market price.
b
If candles and candlesticks are complements, then which of the following would increase the demand for candles? a. a decrease in income b. a decrease in the price of candlesticks c. a decrease in the price of candles d. an increase in the price of candlesticks
b
If cereal is a normal good, this will cause the demand for cereal to a. Increase b. decrease
c
If consumers want to buy more apples at every possible price, a. the demand curve is shifted to the left. b. there is a movement upward and to the left along the demand curve. c. the demand curve is shifted to the right. d. there is a movement downward and to the right along the demand curve.
d
If gum and breath mints are substitutes, a higher price for gum would a. decrease the demand for gum. b. increase the demand for gum. c. decrease the demand for breath mints. d. increase the demand for breath mints.
b
If the price of cheeseburgers rose to $12 per cheeseburger, producers would produce more cheeseburgers than if the price were $10 per cheeseburger. If the price of hotdogs fell to $3 per hotdog, producers would produce fewer hotdogs than if the price were $5 per hotdog. These relationships illustrate a. the difference between substitute and complementary goods. b. the law of supply. c. the law of demand. d. shifts in the supply curve.
c
In competitive markets, a. sellers can influence the market price more easily than buyers. b. there is a single seller of a product and this seller sets the price. c. both buyers and sellers are price takers. d. each seller's products differ from those of other sellers in the same market.
a
In the market for bread, supply is determined by a. the sellers of bread. b. the buyers of bread. c. both the buyers and sellers of bread. d. the government.
c
Sonia buys 15 lattes per month when the price is $4.00 per latte and 20 lattes per month when the price is $3.00 per latte. Sonia's buying decisions demonstrate a. market equilibrium. b. the law of supply. c. the law of demand. d. quantities supplied.
a
Suppose a study from a major university reports that consuming chocolate reduces the likelihood of dying from cancer. We could expect the current demand for a. hot cocoa to increase. b. tea to increase. c. coffee to increase. d. soda to increase.
d
Suppose milk is currently selling for $2.50 per gallon, but the equilibrium price of milk is $3.00 per gallon. We would expect a a. surplus to exist and the market price of milk to decrease. b. shortage to exist and the market price of milk to decrease. c. surplus to exist and the market price of milk to increase. d. shortage to exist and the market price of milk to increase.
c
Suppose that Jarrod receives a pay increase. We would expect a. Jarrod's demand for ramen noodles, an inferior good, to shift to the right. b. to observe Jarrod moving down and to the right along his demand curve for pizza. c. Jarrod's demand for pizza, a normal good, to shift to the right. d. Jarrod's demand for both peanut butter and jelly to increase because they are complements.
b
Suppose tickets to a baseball game are currently selling for $60 each, but the equilibrium price of tickets is $50 each. We would expect a a. surplus to exist and the market price of tickets to increase. b. surplus to exist and the market price of tickets to decrease. c. shortage to exist and the market price of tickets to decrease. d. shortage to exist and the market price of tickets to increase.
a
The amount of a good that buyers are willing and able to purchase at a given price a. Quantity demanded b. Demand curve c. demand schedule d. law of demand
a
The amount of a good that sellers are willing and able to supply at a given price a. Quantity Supplied b. Supply curve c. Supply schedule d. law of Supply
d
The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises a. Quantity Supplied b. Supply curve c. Supply schedule d. law of Supply
d
The claim that, with other things being equal, the quantity demanded of a good falls when the price of that good rises a. Quantity demanded b. Demand curve c. demand schedule d. law of demand
T
The market for public utilities, such as gas and electricity, does not exhibit the two primary characteristics that define perfectly competitive markets. True False
b
The supply curve for yoga mats shifts when a. the demand for yoga mats shifts. b. a determinant of the supply of yoga mats other than the price of yoga mats changes. c. yoga becomes popular. d. the price of yoga mats changes.
b
What would happen to the equilibrium price and quantity of sunscreen if a new formula is developed that makes production cheaper, and scientists discovered that sunscreen causes more cancer than sun damage? a. The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous. b. The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. c. Both the equilibrium price and quantity would increase. d. Both the equilibrium price and quantity would decrease.
a
When the price of lumber changes, the demand curve for lumber a. does not shift because the quantity demanded of lumber does not change at every possible price. b. shifts because the quantity demanded of lumber changes at every possible price. c. does not shift because the quantity demanded of lumber changes at every possible price. d. shifts because the quantity demanded of lumber does not change at every possible price.
d
When the price of pizza increases, the a. supply of pizzas increases. b. supply of pizzas decreases. c. quantity supplied of pizza decreases. d. quantity supplied of pizza increases.
d
Which of the following Scenarios would cause a surplus in a market? a. The actual price is $20, the equilibrium price is $25, the quantity supplied is 100 and the quantity demanded is 75. b. The actual price is $20, the equilibrium price is $25, the quantity demanded is 100 and the quantity supplied is 75. c. The actual price is $25, the equilibrium price is $20, the quantity demanded is 100 and the quantity supplied is 75. d. The actual price is $25, the equilibrium price is $20, the quantity supplied is 100 and the quantity demanded is 75.
d
Which of the following changes would not shift the demand curve for gas? a. Senior citizens incomes increase due to a change in social security benefits. b. The price of gas-powered cars increases due to higher steel prices. c. The price of gas is expected to increase in near future due to decreased production. d. The price of gas decreases due to increased production.
c
Which of the following demonstrates the law of supply? a. When the price of jewelry increased, jewelry producers decreased their quantity supplied of jewelry. b. When the price of cheese increased, pizza producers decreased their supply of pizzas. c. When camera prices rose, camera sellers increased their quantity supplied of cameras. d. When production technology for tablet computers improves, tablet producers increased their supply of tablets.
a
Which of the following events must cause equilibrium price to fall in the market for gas-powered snow blowers? a. The weather forecasters predict a drier than normal winter and producers of gas-powered snow blowers find a faster method of production. b. The price of gas decreases and the price of plastic, an important input into snow blowers, decreases. c. Shoveling snow is shown to be more environmentally friendly than using a snow blower and producers of gas-powered snow blowers expect prices of gas-powered snow blowers to increase in the near future. d. The price of snow plow services increases and there are fewer producers of gas-powered snow blowers.
c
Which of the following events would cause a movement upward and to the left along the demand curve for flannel sheets? a. A study finds that flannel sheets lead to deeper, more restful sleep than other types of sheets. b. The price of silk sheets decreases, and silk sheets are a substitute for flannel sheets. c. The price of flannel sheets increases. d. The price of down comforters increases, and down comforters are a complement to flannel sheets.
d
Which of the following is not an example of a competitive market? a. One buyer is not able to negotiate a lower purchase price for t-shirts because there are many other buyers willing to pay the market price. b. In a college town, there are many buyers and sellers of pizza. c. An auto repair shop in Centerville charges the same price for an oil change as the many other auto repair shops in Centerville. d. Residents of Middleton have one cable television provider.
d
Which of the following is the most likely to be a perfectly competitive market? a. electricity b. soft drinks c. jeans d. wheat
inferior good
a good for which, other things equal, an increase in income leads to a decrease in demand
normal good
a good for which, other things equal, an increase in income leads to an increase in demand
market
a group of buyers and sellers of a particular good or service
competitive market
a market in which there are many buyers and many sellers so that each has a negligible impact on the market price
Equilibrium
a situation in which the market price has reached the level at which quantity supplied equals quantity demanded
quantity demanded
the amount of a good that buyers are willing and able to purchase
law of supply and demand
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
Law of Demand
the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises
equilibrium price
the price that balances quantity supplied and quantity demanded
equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
complements
two goods for which an increase in the price of one leads to a decrease in the demand for the other
substitute
two goods for which an increase in the price of one leads to an increase in the demand for the other
