Econ chapter 2B

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 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.

On the Heritage Foundation's scale of "Economic Freedom," which of the following factors contribute to "Economic Freedom"?

a legal system conducive to business

if demand decreases and the price doesn't change, there will be

a surplus

When the expected future price of a good rises,

consumers increase their willingness to buy, or "stock up".

An increase in the subsidy paid to producers of tobacco

shifts the supply of tobacco to the right.

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

supply curve to shift to the left.

If the price of inputs increases, the

supply curve will shift to the left.

If goods A and B are considered complements, a decrease in the price of A would cause

the demand curve for B to shift to the right.

If a good is normal and income decreases, then

the demand curve will shift to the left.

If a good is inferior and income decreases, then

the demand curve will shift to the right.

An increase in the income of consumers will cause the

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

If technology decreases, then

the supply curve will shift to the left.

If technology increases, then

the supply curve will shift to the right.

The quintessential example of substitute goods would be

the switching of Granny Smith for Golden Delicious apples.

During flu season, as people try to boost their immune system believing that orange juice might aid in keeping viruses at bay,

the taste for orange juice would rise.

Which of the following is true?

Demand is downward sloping and supply is upward sloping.

Which of the following is the best example of the concept of "complement"?

Hot dogs and hot dog buns

Which of the following goods are likely to be considered complements?

Peanut butter and jelly

Which of the following is the best example of the concept of "inferior"?

Ramen noodles

Which of the following is the best example of the concept of "normal"?

SUV's

A per unit tax or percentage tax on a good or service that must be paid by consumers of that good is

an excise tax.

The decrease in the price of a good would

cause a movement along the demand curve to a (lower price, higher quantity) point.

The decrease in the price of a good would

cause a movement along the supply curve to a (lower price, lower quantity) point.

If the taste for a good decreases, the

demand curve will shift to the left.

If two goods are considered complements and the price of one decreases then the other good's

demand curve will shift to the right.

If two goods are considered substitutes and the price of one increases, the other good's

demand curve will shift to the right.

Where the supply and demand curves cross, the amount that consumers want to buy is

equal to the amount firms want to sell.

Improvements in technology tend to

increase supply, lower the cost of producing a given output, and increase the output produced for a given cost.

The supply curve slopes upward because producers' cost per unit eventually

increases as more units are sold.

If you overheard a farmer discussing his planting plans for the upcoming season, and he said "The price of corn has gone way up. I know I'll have to put some money into fertilizer on that field on the hill that's been idle all these years, but it will be worth it this year." This would be consistent with which justification for an upward sloping supply curve?

increasing marginal cost

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.

A decrease in household income for a good that is considered normal would

move its demand curve to the left.

A decrease in the degree a good is liked (the increase in the taste for a good) would

move its demand curve to the left.

If a subsidy (going to consumers) is created for a good, this would

move its demand curve to the left.

If a subsidy (going to consumers) on a good is eliminated, this would

move its demand curve to the left.

If there is an expectation that the price of a good will decrease in the next month, this would immediately

move its demand curve to the left.

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

move its demand curve to the right.

If there is a good that is consumed almost entirely by the elderly, an aging of the overall population would

move its demand curve to the right.

If a subsidy (going to producers) on a good is eliminated, this would

move its supply curve to the left.

If there is an expectation that the price of a good will increase in the next month, this would immediately

move its supply curve to the left.

The increase in the price of a good that is another potential output for another good would (for the second good)

move its supply 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 there is an expectation that the price of a good will decrease in the next month, this would immediately

move its supply curve to the right.

The decrease in the price of a good that is another potential output for another good would (for the second good)

move its supply curve to the right.

The increase in the number of sellers of a good would

move its supply curve to the right.

Market quantity demanded measures the amount of the product that people in the market want to buy

per unit time, such as a day or week.

An increase in which of the following determinants of demand will have an ambiguous (uncertain) effect on price?

price of a complement

In a market served by vendors who sell both orange juice and bottled water from their carts, an increase in the price of bottled water will tend to

reduce the supply of orange juice.