ECO 130

A shortage exists when?

QD > QS

If farmers expect the government to increase subsidies on corn grown next year for ethanol production, we should not be surprised to observe?

a decrease in wheat production

If people consume fewer bottles of orange juice as their income rises, orange juice is?

an inferior good.

If the price of a bottle of orange juice in the downtown area is $0.50 per bottle and, at that price, each of the 10,000 people working in the downtown area wants to buy two bottles of orange juice per day, the quantity demanded in the downtown orange juice market would be?

20,000 bottles per day.

If the price of a typical good falls, the quantity supplied for that good will?

decrease.

An increase in the excise tax imposed upon consumers of gasoline?

decreases the demand for gasoline.

If the price of a good is expected to rise in the future its

demand curve in the current period will shift to the right. supply curve in the current period will shift to the left.

Another term for surplus is?

excess supply.

If the price is so high that vendors find too many unsold bottles remaining in inventory, they might dispose of their excess inventory by?

lowering the price per bottle.

An increase in household income for a good that is considered inferior would?

move its demand curve to the left.

If a subsidy (going to producers) is created for a good this would?

move its supply curve to the right.

If a firm has two production alternatives and the price of one decreases this will cause the other good's?

supply curve to shift to the right.

If the price of inputs decreases, the?

supply curve will shift to the right.

If demand decreases and the price doesn't change, there will be a?

surplus.

At the equilibrium price?

the amount buyers wish to purchase equals the amount producers wish to sell.

If goods A and B are considered complements, an increase in the price of A would cause?

the demand curve for B to the left.

An increase in the income of consumers will cause the?

the demand for some goods to rise and for others to fall.

If a faster production technology for a particular good is developed, then?

the supply curve for that good will shift to the right.