microeconomics ch 3

the willingness and ability of a consumer to buy a normal product falls because of:

a fall in income

an increase in the equilibrium price of a good and an intermediate change in the equilibrium quantity is the result of:

an increase in demand and decrease in supply

which of the following causes consumers to buy larger quantities of a product at each possible price?

an increase in the number of buyers

which of the following is likely to cause an increase in the demand for a good or service?

an increase in the number of buyers

equilibrium price and quantity in a market changes when there is a change in:

demand, consumer tastes, supply

a demand curve measures quantity _________ on the horizontal axis and ________ on the vertical axis

demanded; price

the ________ for a product are factors or variables, other than the price of the product, that affect consumption or buyers' decisions to purchase and consume

determinants of demand

only things equal, if consumers believe that gas prices will rise in a week, the demand for gas today will ___________

increase

an increase in equilibrium quantity and intermediate change in equilibrium price is a result of which of the following?

increase in both

an increase in the sales, property or any other tax will _________ production costs and ________ supply

increase; decrease

other things equal, firms will produce and offer for sale _________ of their product at a high price than at a low price

more

according to the law of supply, price and quantity supplied have a(n) ______________ relationship

positive

a change in demand occurs due to a change in a consumer's state of mind about purchasing a product that is based on something other than the ___________ of the product

price

a change in quantity supplied is caused by an increase or decrease in the _______ price of the product under consideration and nothing else

price

on a supply curve, __________ is labeled on the vertical axis

price

the supply curve illustrates the relationship between:

price and quantity supplied

the determinant of supply dealing with alternative products that can be produced by firms is called:

price of substitutes in production

a change in causes the supply curve of a product to shift leftward or rightward

resource prices

the number of buyers is a determinant of market ___________

demand

improvements in technology is a determinant of ___________

supply

which of the following factors decrease demand for any good or service?

a decrease in the price of a substitute good, falling incomes and the product is a normal good, an unfavorable change in consumer tastes

an increase in business taxes causes ___________ in supply and will __________ production costs

a decrease; increase

a firm or a household should continue to engage in activity as long as the marginal _______ exceeds the marginal ______

benefit; cost

the law of demand is consistent with common sense because people ordinarily:

buy more at a low price

one of the determinants of demand is ____________ expectations

consumer

which of the following are determinants of demand?

consumer expectations, consumer tastes, changes in income, number of buyers, prices of related goods

the _________ incurred by firms when producing a good or service arise from the prices of the inputs that are used to produce said good or service

costs of production

a decrease in supply and a simultaneous and proportional decrease in demand will result in a(n) ________ in equilibrium quantity, with no effect on equilibrium price

decrease

when a price ceiling is established, the new price and quantity are now at:

disequilibrium

which of the following shows the effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand?

equilibrium price falls and the change in quantity is intermediate

changes in _________ about the future price of a product may affect the producer's current willingness to _______ that product

expectations; supply

if a decline in demand is greater than an increase in supply, the equilibrium quantity will ________

fall

true or false: as more firms enter an industry, the supply curve shifts to the left

false

true or false: changes in the determinants of demand will cause a movement along the demand curve

false

true or false: on the supply and demand model, quantity demanded is illustrated on the vertical axis, while price is illustrated on the horizontal axis

false

a price ________ is a minimum price fixed by the government, generally imposed above the price, which is otherwise known as the equilibrium price

floor

at any price above the equilibrium price, such as with a price floor, quantity supplied will be __________ the quantity demanded, resulting in a persistent excess supply or surplus of product

greater than

how is the inverse relationship between price and quantity demanded of a good or service best described?

holding all else constant, as price increases, quantity demanded decreases and as price decrease, quantity demanded increases

which pair exemplifies substitute goods?

hot dogs and hamburgers

from an economic perspective, which of the following are true of a market?

in a market, buyers and sellers interact in their desire to buy and sell a good or service, a market is a virtual and/or physical institution or space, the pursuit of buyers and sellers in making themselves better off

which of the following is a determinant of demand?

income

in general, a rise in income causes a(n) ________ in demand for most products and a fall in income causes a(n) ________ in demand for most products, other things equal

increase; decrease

________ in demand while holding supply constant ________ equilibrium price and _________ equilibrium quantity

increase; raises; raises

a favorable change in consumer tastes and preferences for a product will ___________ demand, illustrated as a shift of the demand curve to the ___________

increase; right

a normal good is an item for which demand __________ when income rises and _________ when income falls

increases; decreases

greater resource prices __________ the costs of production ___________ the incentive for firms to produce the good at each price

increases; reducing

the vast majority of goods that are not related to one another are called _______ goods

independent

products that have increased demand when consumer incomes rise and increased demand when consumer incomes fall are called ___________ goods.

inferior

when two variables are being examined, and one variable moves one way and the other variable moves in the opposite direction, this is called a(n)

inverse relationship

if costs of production rise, the producer has an incentive to produce _______ output

less

_______ benefit is the additional utility gained from consuming one more unit of a good or service

marginal

the added cost of producing one more unit of output is called __________ cost

marginal

which of the following are determinants of supply?

resource prices, technology, taxes and subsidies, prices of other goods, producer expectations, and the number of sellers in the market

other things equal, as a buyer's income rises, the willingness and ability to buy a normal product __________

rises

the fundamental characteristic of demand, other things equal, is that as the price falls, the quantity demanded for a product _________

rises

the law of supply states that as price __________, the quantity supplied rises; as price _________, the quantity supplied falls

rises; falls

a demand __________ organizes the relationship between price and quantity in a tabular format, whereas the demand _________ is a graphical representation of this relationship

schedule; curve

a ____________ the demand curve represents a change in demand while a ___________ the demand curve represents a change in the quantity demanded

shift; movement along

government-set prices cause:

shortages or surpluses, distort resource allocation, and produce negative side effects

which of the following types of goods affect the demand for another product due to a change in their price?

substitue and complementary goods

the market demand curve is the __________ of all _________ demand curves for a good or service

summation; individual

products whose demand varies directly with changes in money or income are called normal or _________ goods

superior

_______ refers to the product of a product, whereas demand refers to the consumption of a product

supply

market __________ is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period

supply

producer expectations of future prices are a determinant of __________

supply

eq price and quantity in a market changes when there is a change in

supply, tastes, demand

when the number of sellers or producers in an industry increases, ________ of a particular good or service will _______. When the number of sellers in an industry _________, supply of a particular good or service will ____________

supply; rise; decreases; fall

a demand schedule illustrates the relationship between price and quantity in a ________ format, whereas the demand curve is a __________ representation

tabular; graphical

true or false: a change in quantity demanded is caused by an increase or decrease in the price of the product under consideration and nothing else

true

true or false: resource costs or changes in these costs to production are responsible for shifts in the supply curve

true

true or false: the number of buyers in a market is a determinant of demand

true