Supply and Demand P1

Which of the following is characterized by the private ownership of resources and the use of markets to coordinate and direct economic activity? Multiple choice question. An economic system A market system A command system A democratic system

A market system

A rise in the price of fish will reduce the quantity of fish demanded and a rise in consumers' income will increase the demand for fish. What are assumed in this statement. Multiple select question. All other things are equal The supply of fish rises Elasticity of demand for fish is not zero Fish is an inferior good Fish is a normal good

All other things are equal Elasticity of demand for fish is not zero Fish is a normal good

An unfavourable change in consumer tastes and preferences for a product will blank demand, shifting the demand curve to the blank.

Blank 1: decrease, reduce, lower, cut, lessen, drop, or diminish Blank 2: left or leftward

The BLANK mechanism in markets responds to excess demand or excess supply and induces changes in BLANK leading to restoration of market BLANK.

Blank 1: self-correction or self-correcting Blank 2: prices or price Blank 3: equilibrium

Which of the following decrease demand? Multiple select question. Falling incomes and the product is a normal good A decrease in the price of a substitute good An unfavourable change in consumer tastes An increase in the number of buyers A new consumer expectation that either prices or income will be higher in the future

Falling incomes and the product is a normal good A decrease in the price of a substitute good An unfavourable change in consumer tastes

Which of the following decrease demand? Multiple select question. A new consumer expectation that either prices or income will be higher in the future An increase in the number of buyers Falling incomes and the product is a normal good An unfavourable change in consumer tastes A decrease in the price of a substitute good

Falling incomes and the product is a normal good An unfavourable change in consumer tastes A decrease in the price of a substitute good

Goods that are used together with other goods are called substitutes. True false question.TrueFalse

False

The fundamental characteristic of demand, other things equal, is that as the price falls, the quantity demanded for a product decreases. True false question. True False

False

True or false: Consumer expectations are a determinant of supply. True false question.TrueFalse

False

True or false: For many people, Coke and Pepsi are complements.

False

True or false: If the demand for a good increases when consumer incomes rise, then the good is considered an inferior good. True false question. True False

False

Typically, quantity demanded is represented on the BLank axis and price is on the blank axis.

Horizontal, vertical

Which of the following represents an institution or mechanism that brings buyers and sellers into contact? Multiple choice question. Market Bank Government Contract

Market

Which curve shows the seller's minimum acceptable price for each unit of the product? Multiple choice question. Revenue curve Marginal revenue curve Demand curve Supply curve

Supply curve

From an economic perspective, which of the following are true of a market? Multiple select question. The pursuit of buyers and sellers in making themselves better off Buyers and sellers interact in their desire to buy and sell a good or service A location used to hold producer supplies and inventories It is a virtual and/or physical institution or space Need

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

True or false: When the price of one product rises, the demand for its substitute will increase.

True

True or false: Quantity demanded is illustrated on the vertical (y) axis, while price is illustrated on the horizontal (x) axis. True false question. True False

True Reason: Price is always illustrated on the vertical axis

Which pair exemplifies substitute goods? Multiple choice question. Golf balls and golf clubs Snow boards and lift tickets CDs and CD players VW Golfs and Ford Focuses

VW Golfs and Ford Focuses

Which of the following illustrates the relationship between a good and its complement? Multiple select question. When the price of pizzas decreases, the demand for burgers decreases When the price of tuition decreases, the demand for textbooks increases When the price of lettuce increases, the demand for salad dressing decreases When the price of Nike trainers increases, the demand for Reebok trainers increases

When the price of tuition decreases, the demand for textbooks increases When the price of lettuce increases, the demand for salad dressing decreases

A shift in demand arises from a change in consumers' minds because of: Multiple select question. the change in the product price only a change in a determinant of demand other than price a change in government regulations related to pricing a change in the amount of products produced a change in consumer preferences

a change in a determinant of demand other than price a change in consumer preferences

The willingness and ability of a consumer to buy a normal product falls because of ______. Multiple choice question. no change in income a fall in income a rise in income a raise in wages

a fall in income

In order to construct a supply curve and demonstrate the law of supply, one would have to draw ______. Multiple choice question. an upward sloping curve to demonstrate the direct relationship between price and quantity supplied an upward sloping curve to demonstrate the inverse relationship between price and quantity demanded a downward sloping curve to demonstrate the direct relationship between price and quantity demanded a downward sloping curve to demonstrate the inverse relationship between price and quantity demanded

an upward sloping curve to demonstrate the direct relationship between price and quantity supplied

The fundamental characteristic of demand, other things being equal, is: Multiple choice question. as the price rises, the quantity demanded rises as the price falls, the quantity demanded does not change as price falls, the quantity demanded rises as the price falls, the quantity demanded falls

as price falls, the quantity demanded rises

One of the determinants of demand is ______ expectations. Multiple choice question. supply consumer producer input prices

consumer

If the price of hot dogs increases, the demand for hot dog buns will .

decrease

When the price of a product falls, demand for its substitute will _______. Multiple choice question. stay the same first decreases and then increases increase decrease

decrease

If the price of hot dogs increases, the demand for hot dog buns will BLANK.

decrease, fall, decline, or reduce

Other things being equal, the amount of a product that will be purchased at various possible prices is shown by: Multiple choice question. output demand the production possibilities frontier supply

demand

Other things being equal, the amount of a product that will be purchased at various possible prices is shown by: Multiple choice question. supply demand output the production possibilities frontier

demand

An important limitation of comparative static analysis is that it ignores the path by which the economy moves from one equilibrium to another.

dynamic, adjustment, or temporal

Typically, quantity demanded is represented on the BLANK axis and price is on the BLANK axis.

horizontal vertical

Which of the following is a determinant of demand? Multiple choice question. Resource prices Income Producer expectations Technology

income

When the price of Coke rises, the demand for Pepsi is likely to ______. Multiple choice question. stay the same first decrease and then increase decrease increase

increase

A favourable change in consumer tastes and preferences for a product will BLANK demand, shifting the demand curve to the BLANK

increase, raise, or heighten right, or rightward

Other things being equal, as a buyer's income rises, the willingness and ability to buy a normal product BLANK.

increases or rises

Products that have decreased demand when consumer incomes rise and increased demand when consumer incomes fall are called ______ goods. Multiple choice question. normal inferior exogenous luxury

inferior

In a(n) BLANK relationship between price and quantity demanded, as price falls, quantity demanded will rise.

inverse or negative

There is a(n) BLANK relationship between the price of a good or service and the quantity demanded of that good or service.

inverse or negative

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): Multiple choice question. independent relationship positive relationship inverse or negative relationship direct relationship

inverse or negative relationship

A BLANK is an institution or mechanism that brings buyers and sellers into contact.

market

For every good or service, the quantities demanded by individual consumers at every price are added together to compute ______ for a good or service. Multiple choice question. individual supply market demand market supply individual demand

market demand

Buyers and sellers are brought together in a BLANK.

market or market place

The millions of decisions made by households and businesses are highly coordinated with one another by ______ and ______. Multiple choice question. markets; prices markets; government markets; buyers buyers; sellers government; institutions

markets; prices

An inverse relationship between two variables is a(n) ______ relationship. Multiple choice question. upside-down complex positive negative

negative

Comparative static analysis is comparative because it compares the BLANK and BLANK equilibria.

new and old

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 BLANK of the product.

price

A change in the price of Coke will change the ________ for Coke while a change in the price of Pepsi (a substitute) will change the ______ for Coke. Multiple choice question. demand; quantity demanded quantity demanded; quantity demanded quantity demanded; demand demand; demand

quantity demanded; demand

When we draw a supply curve we normally put BLANK on the x-axis (horizontal axis) and BLANK on the y-axis (vertical axis).

quantity/quantity supplied price

Which of the following is a complement to fish and chips? Multiple choice question. Broccoli Salt and vinegar Steak pies Chicken pies

salt and vinegar

The market demand curve is the ______ of all ______ demand curves for a good or service. Multiple choice question. summation; individual product; individual quotient; individual exponent; individual

summation; individual Reason: The market demand curve is the aggregate of all individual demand curves.

Products whose demand varies directly with changes in money or income are normal and BLANK goods, respectively.

superior or luxury

Products whose demand varies directly with changes in money or income are normal and _______ goods, respectively.

superior or luxury

The BLANK (one word) curve, also known as the marginal cost curve, shows the seller's minimum acceptable price at each unit of the product.

supply

The interplay of ______ and ______ determines quantity produced of a given good and the price at which it is bought and sold. Multiple select question. supply demand choice

supply and demand

Which curve shows the seller's minimum acceptable price for each unit of the product? Multiple choice question. Supply curve Revenue curve Demand curve Marginal revenue curve

supply curve

In a(n) BLANK relationship between price and quantity demanded, as price falls, quantity demanded will rise.

inverse

A change in the price of Coke will change the ________ for Coke while a change in the price of Pepsi (a substitute) will change the ______ for Coke. Multiple choice question. quantity demanded; demand demand; demand demand; quantity demanded quantity demanded; quantity demanded

quantity demanded; demand

Which of the following are reasons for the inverse relationship between price and quantity demanded? Multiple select question. A lower price increases the purchasing power of a buyer's income, enabling a buyer to purchase more of a product Consumption is subject to diminishing marginal utility Buyers will buy more of a good if their friends are buying it People ordinarily buy more of a product at a low price than at a high price A higher price makes it more likely the consumer will substitute another good A lower price represents a lower quality product

A lower price increases the purchasing power of a buyer's income, enabling a buyer to purchase more of a product Consumption is subject to diminishing marginal utility People ordinarily buy more of a product at a low price than at a high price A higher price makes it more likely the consumer will substitute another good

From an economic perspective, which of the following are true of a market? Multiple select question. It is a virtual and/or physical institution or space The pursuit of buyers and sellers in making themselves better off A location used to hold producer supplies and inventories Buyers and sellers interact in their desire to buy and sell a good or service

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

Modern economies make intensive use of BLANK and BLANK to allocate resources between competing uses.

prices and markets

How is the inverse relationship between price and quantity demanded of a good or service best described? Multiple choice question. Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded increases Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded decreases Holding all else constant, as price increases, quantity demanded increases and as price decreases, quantity demanded increases Holding all else constant, as price increases, quantity demanded increases and as price decreases, quantity demanded decreases

Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded increases