ch 3

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which of the following are determinants of demand

-The price of the good or service. -Prices of related goods or services. These are either complementary (purchased along with) or substitutes (purchased instead of). -Income of buyers. -Tastes or preferences of consumers. -Expectations.

government controlled prices in the form of price ceilings and price floors

-stifle the rationing functions of prices -produce negative side effects -distort resource allocation

government controlled prices cause...

-surpluses -shortages -distortions in resource allocation -negative side effects

which of the following illustrates the relationship between a good and its complement

-when the price of lettuce increase, the demand for salad dressing decreases -when the price of tuition decreases, the demand for textbooks increases

which of the following describes the law of demand?

An increase in price is associated with a decrease in quantity demanded, all other things are equal

choose all of the following that will cause change in supply, not quantity supplied

B. Number of Sellers C. Producer expectations D. Technology

if demand decreases and supply stays constant

EP and EQ falls

if supply increases and demand stays constant...

EP falls and EQ rises

if demand decreases and supply increases

EP falls and the change in quantity is indeterminate

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

Price changed or paid for substitute goods in production

_______ in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity

a decrease

a decrease in demand while holding supply constant

a decrease in EQ and EP

The supply curve is ______ sloping curve

an upward

one of the determinants of demands is ________ expectations

consumer

an increase in business taxes causes ______ in supply and _______ production cost

decrease, increase

an increase in ______ while holding supply constant results in an increase in both equilibrium price and quantity

demand

the number of buyers is determinant of market

demand

a shortage results from an excess of quantity ____

demanded

the _______ of a supply of a good are factors other than the goods ______ that have an effect on the supply of a good or service and cause the supply curve to shift

determinants, price

price and quantity supplied have a _____ relationship

direct

producer expectations refer to firms expectations of _____ for a good or service they produce

future prices

______ resource prices raise production cost and, assuming a fixed product price, ____ profits

higher, reduce

quantity demanded is illustrated on the ___ axis, while price illustrated is on the ___ axis.

horizontal, vertical

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

independent

the law of demand describes a _____ relationship between the price of a good or service and the quantity demanded of that good or service

inverse

when two variables are being examined, and one variable moves one way and the other moves the opposite direction, this is called

inverse relationship

a demand curve shows the plotted:

inverse relationship between price and quantity demanded for a product

a price ceiling is the maximum legal price a seller may charge for a product or service where a price at or below the ceiling is _____ and a price above the ceiling is ____

legal, illegal

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

less

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

more

the interaction of buyers and sellers determines equilibrium price and equilibrium ____

quantity

when each additional worker of a firm produces less additional output than previously hired workers, then the marginal cost of additional units of output:

rises

when the government provides financial assistance for the production of a good which lowers producers cost and increases supply, it is called a

subsidy

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

substitue and complementary

the supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis

supplied, price

a surplus is also known as an excess of _______

supply

improvements in technology are determinants of ____

supply

market _____ is a schedule or curve showing the various amounts or a product that producers are willing and able to make available for sale

supply

the number of sellers competitors in a market is a determinant or shifter of the ____ curve

supply

which of the following specifically refers to demand

the buyer side of any market

if supply increases and demand increases...

the change in EP is indeterminate and EQ rises


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