Chapter 4

In a perfectly competitive market, at the market price

buyers can buy all they want and sellers can sell all they want.

The sum of all the individual demand curves for a product is called

market demand.

A demand schedule is a table that shows the relationship between

price and quantity demanded.

There is no shortage of scarce resources in a market economy because

prices adjust to eliminate shortages

There is no shortage of scarce resources in a market economy because

prices adjust to eliminate shortages.

he signals that guide the allocation of resources in a market economy are

prices.

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Which of the following does not affect an individual's demand curve?

the number of buyers

A market supply curve shows

the total quantity supplied at all possible prices.

Who gets scarce resources in a market economy?

whoever is willing and able to pay the price

A decrease in supply is represented by

a leftward shift of a supply curve.

In a competitive market, the quantity of a product produced and the price of the product are determined by

all buyers and all sellers

The law of demand states that, other things equal

an increase in price causes quantity demanded to decrease.

A movement upward and to the right along a supply curve is called

an increase in quantity supplied.

Which of the following would not shift the supply curve for mp3 players?

an increase in the price of mp3 players

Which of the following events will definitely cause equilibrium price to fall?

demand decreases and supply increases