Micro Ch. 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:

decrease in population

According to the law of supply, as price increases,

quantity supplied will rise

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

the price rises

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

Which of the following would not be a market transaction?

payment made to a disaster victim

A market exists when:

people exchange money for goods and services

In a market economy, there is a _____ 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

The law of supply says:

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

Ben likes carrots less today than he did yesterday.

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

A market will:

always trend towards equilibrium

"Supply" refers to the:

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

The basic proposition of the law of demand is that:

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

Butter is a substitute for margarine. If the price of margarine increases, we would expect to see:

both the price of butter and the quantity of butter traded rise

College classes and college textbooks are:

complementary goods

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

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

drop in the price of iPods

Prices:

help buyers find possible substitute goods

Determinants of supply include all of the following except:

income

A demand curve represents an:

indirect relationship between price and quantity demanded

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

inferior

A ____ 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

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____.

more popcorn; rightward

Prices perform which of the following functions?

signal entrepreneurs to enter or leave a market, give buyers an easy means of comparing goods that might substitute for each other, and signal potential employees to enter or leave the labor market as a supplier for a particular job

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

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

A decrease in demand means that:

the demand curve has shifted to the left

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

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

"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

A technological advance causes:

the supply curve to shift to the right