ch 3 demand, supply, and market equilibrium

increase, right

A favorable change in consumer tastes and preferences for a product will _______demand, shifting the demand curve to the (right/left).

demanded

A shortage results from an excess of quantity____

direct

According to the law of supply, price and quantity supplied have a(n)_____relationship

decrease; increase

An increase in business taxes causes a(n) Blank______ in supply and will Blank______ production costs.

Which of the following does not exemplify an improvement in technology affecting supply?

Which of the following does not exemplify an improvement in technology affecting supply? a. introduction of the mass-assembly line b. increased subsidies to farmers for producing more corn c. invention of new vaccines d. advances in producing flat panel computer monitors that have greatly reduced their cots

a. An increase in the number of buyers c. A rise in consumer income if the product is a normal good e. A rise in consumer income if the product is a normal good

Which of the following factors increase the demand for any good or service? Multiple select question. a. An increase in the number of buyers b. Consumer expectations that either prices or income will fall in the future c. A rise in consumer income if the product is a normal good d. An unfavorable change in consumer tastes for the product e. An increase in the price of a substitute good

supply

a change in ______rather than a change in the quantity supplied, means a change in the schedule or a shift of the supply curve.

a subsidy

refers to government financial assistance for the production of a good which lowers producers' costs and increases supply

a. Prices of other goods c. Producer expectations d. Taxes and subsidies

Which of the following are determinants of supply? a. Prices of other goods b. number of buyers c. Producer expectations d. Taxes and subsidies

c

Which of the following are substitutes? Multiple choice question. a. Peanut butter and crackers b. Bleach and cheese c. Pepsi and Coca-Cola d. Guns and bullets

c

Which of the following causes consumers to buy larger quantities of a product at each possible price? Multiple choice question. a. A decrease in the price of a substitute good. b. An unfavorable change in consumer tastes. c. An increase in the number of buyers. d. An increase in the price of a complementary good.

decrease

When the price of a product falls, demand for its substitute will (decrease, increase, stay the same)

a. The development of new technology c. The results of health studies d. The introduction of products

Which are reasons for changes in buyer tastes? Multiple select question. a. The development of new technology b. existing markets c. The results of health studies d. The introduction of products

c

Which exemplifies a pair of complementary goods? Multiple choice question. a. A Toyota truck and a Ford truck b. Home Depot and Lowe's c. A hot dog and relish

shift of, movement along

A Blank______ the demand curve represents a change in demand while a Blank______ the demand curve represents a change in the quantity demanded.

shift of; movement along

A change in demand is represented by a Blank______ the demand curve while a change in quantity demanded is represented by a Blank______ the demand curve.

a decrease in both equilibrium price and quantity

A decrease in demand while holding supply constant results in

a decline

A decrease in demand while holding supply constant results in___________ in both equilibrium price and quantity.

d

A decrease in equilibrium price and indeterminate result on equilibrium quantity is a result of which of the following? a. A simultaneous decrease in both supply and demand b. A simultaneous increase in both supply and demand c. A decrease in supply and a simultaneous increase in demand d. An increase in supply and a simultaneous decrease in demand

increase, decrease

A decrease in supply while holding demand constant results in a(n) Blank______ in equilibrium price, and a(n) Blank______ in equilibrium quantity.

b, c, d

Choose all of the following that will cause a change in supply, not quantity supplied. a. Product price b. Producer expectations c. Number of sellers d. Technology e. Consumer expectations

productive efficiency

Competition among corn producers forces them to use the best technology and right mix of productive resources; otherwise their costs will be too high relative to the market price and they will be unprofitable. This is best described as_______

demand

Consumer expectations are a determinant of__

increase

In general, a firm will ____ (increase/decrease) the output of a good or service if the price of the good is rising.

increase

In general, a firm will _________(increase/decrease) the output of a good or service if the price of the good is rising.

increases; reduces

Greater resource prices Blank______ the costs of production, thereby, Blank______ the incentive for firms to produce the good at each price.

By utilizing fewer resources, thereby lowering costs

How do improvements in productive technology enable firms to produce more units of output?

c

If a consumer demand for a product shifts to the right as the base of users grows, Blank______. Multiple choice question. a. the demand for the product decreases b. the product life cycle is in effect c. the network effects are present d. the product is an inferior good

d

If a consumer demand for a product shifts to the right as the base of users grows, Blank______. Multiple choice question. a. the product is an inferior good b. the demand for the product decreases c. the product life cycle is in effect d. the network effects are present

fall

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

rise

If an increase in supply is larger than a decrease in demand, the equilibrium quantity will

b

If consumer demand for a product shifts to the right as the base of users grows, Blank______. Multiple choice question. a. the demand for the product increases b. congestion effects are present c. the product life cycle is in effect d. the product is a superior good

congestion effects are present

If consumer demand for a product shifts to the right as the base of users grows,_____

less

If costs of production rise, the producer has an incentive to produce (one word) output.

rise, fall

If prices for a good or service are expected to increase in the future, demand for that good or service will Blank______ today. If prices are expected to decrease in the future, demand will Blank______ today.

Lowers cost of production increases supply

If the government of a country subsidizes the production of a good, it...

supply

Improvements in technology is a determinant of_____

a, b, c

In general, what goals does the improvement of production techniques help companies to achieve? Multiple select question. a. Lower production costs b. Increase supply c. Use fewer resources per unit of output d. Reduce employee productivity

a substitute good

In the marketplace, what is a good that can be used in place of another good called?

a complementary good

In the marketplace, what is a good that is used together with another good?

The market supply becomes greater

Other things equal, which of the following is correct regarding increasing the number of sellers in an industry?

b

Which exemplifies a pair of substitute goods? Multiple choice question. a. CDs and CD players b. Hot dogs and hamburgers c. Golf balls and golf clubs d. Snow boards and lift tickets

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.

b

Which exemplifies a pair of substitute goods? Multiple choice question. a. Golf balls and golf clubs b. Hot dogs and hamburgers c. Snow boards and lift tickets d. CDs and CD players

consumer

One of the determinants of demand is ______ expectations.

increase

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

supply

Producer expectations of future prices are a determinant of______

future prices

Producer expectations refer to firms' expectations of Blank______ for a good or service that they produce.

a, b, d, e, f

Select all that apply Which of the following are determinants of demand? Multiple select question. a. Number of buyers b. Prices of related goods c. corporate taxes and subsidies d. Consumer tastes e. Consumer expectations f. Consumer income g. Resource prices

c, d

The demand for a normal good would likely increase in which of the following cases? Multiple select question. a. A decrease in consumer income b. An increase in the price of the good c. A decrease in the price of complementary goods d. An increase in the number of buyers

price of substitutes in production

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

price

The determinants of the supply of a good are any factors other than the product's Blank______ that cause the supply curve of the good to shift.

b, c, d

Which of the following are determinants of supply? Multiple select question. a. Consumer expectations b. Taxes and subsidies c. Technology d. Resource prices

network

The ________ effect occurs when the demand for a product increases because more people are using the product.

the rationing function of prices

The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called

congestion

The decrease in demand for a product that occurs because more people are using the product is called the ________ effect

b

The effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand are shown by: a. an increase in equilibrium price and quantity. b. a decrease in equilibrium price and an indeterminate change in equilibrium quantity. c. an indeterminate change in equilibrium price and indeterminate change in equilibrium quantity. d.an indeterminate change in equilibrium price and an increase in equilibrium quantity.

market, clearing

The equilibrium price where the quantity demanded equals the quantity supplied is known as the ____ - ____price.

equilibrium

The interaction between buyers and sellers determines the equilibrium price and the___ quantity

supply

The number of sellers or competitors in a market is a determinant or shifter of the_________ curve

related

The price of Blank______ goods is a determinant of demand.

supply

The prices of substitute goods in production is a determinant of_____

resources

The prices of the ____ used in the production process help determine the costs of production incurred by firms.

productive

The production of a good or service in the least costly way is known as___ efficiency

buying and selling decisions are consistent

The rationing function of prices refers to the ability of the competitive forces of supply and demand to establish a price at which

negative

The relationship between the price of a good or service and the quantity demanded of that good or service described by the law of demand is

price and quantity supplied

The supply curve illustrates the relationship between_________

upward

The supply curve is Blank______ sloping curve.

supplied; price

The supply curve measures quantity Blank______ on the horizontal axis and Blank______ on the vertical axis.

independent

The vast majority of goods that are not related to one another are called______goods

a fall in income

The willingness and ability of a consumer to buy a normal product falls because of Blank______.

independent goods

What are two goods called when a change in the price of one good has little or no effect on the demand for the other?

The interaction of buyers and sellers

What determines market price and equilibrium output in a market?

the equilibrium price

What is the price where the intentions of buyers and sellers match?

increase

When the price of Coke rises, the demand for Pepsi is likely to

increase

When the price of Coke rises, the demand for Pepsi is likely to (increase, decrease, stay the same)

falase

True or false: A shortage occurs when quantity supplied exceeds quantity demanded.

true

True or false: A surplus is when quantity supplied exceeds quantity demanded.

false

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

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

a, c, e

Which of the following factors increase the demand for any good or service? Multiple select question. a. An increase in the price of a substitute good b. An unfavorable change in consumer tastes for the product c. A rise in consumer income if the product is a normal good d. Consumer expectations that either prices or income will fall in the future e. An increase in the number of buyers

b

Which of the following has the greatest effect on the quantity supplied? a. tastes and preferences b. price c. cost d. positive technological changes

a, b

Which of the following illustrates the relationship between a good and its complement? Multiple select question. a. When the price of tuition decreases, the demand for textbooks increases. b. When the price of lettuce increases, the demand for salad dressing decreases. c. When the price of hamburger decreases, the demand for hot dogs decreases. d. When the price of Nikes increases, the demand for Reeboks increases.

b

Which of the following is a complement to hamburger patties? a. paper cups b. hamburger buns c. chicken d. hot dogs

b

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

a, b

Which of the following statements are true? Multiple select question. a. An increase in the price of a normal good would decrease the quantity demanded of the good. b. A decrease in consumers' income would decrease the demand for a normal good. c. A decrease in consumers' income would decrease the demand for an inferior good. d. An increase in consumers' income would decrease the demand for a normal good.

a, b

Which of the following types of goods affect the demand for another product due to a change in their price? (Select all that apply) Multiple select question. a. Substitute goods b. Complementary goods c. Normal goods d. Inferior goods

a

Which statement about demand and supply is true? Multiple choice question. a. An increase in consumer income is likely to increase the demand for a normal good. b. An increase in consumer income shifts the demand curve to the left. c. An increase in the price of a good is likely to decrease the supply of the good. d. An increase in the price of a good shifts the supply curve to the left.

cost of production

______ 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.

higher; reduce

______ resource prices raise production costs and, assuming a fixed product price, Blank______ profits.

A decrease in the supply of a good

______, while holding demand constant, results in an increase in the equilibrium price of the good, but a decrease in the equilibrium quantity of the good.

complementary

a ______ good is one that is used together with another good.