Econ Chapter 3

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________.

All else is held equal

Refer to Figure 3-3. A change from Point A to Point E represents a(n):

Decrease in Supply

Refer to Figure 3-2. A change from Point A to Point B represents a(n):

Decrease in quantity demanded.

The ___________ is the only price where quantity demanded is equal to quantity supplied.

Equilibrium Price

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases.

Price, quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________.

Quantity Supplied

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

The Supply Curve

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

The statement is correct.

When quantity demanded decreases in response to a change in price:

There is a movement up along the demand curve.

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:

A shift of the demand curve for beef to the left.

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:

Andy's demand for beer to increase.

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.

Cost of Production Fall

Which of the following would reduce the supply of microcomputers?

Higher wage rates for the workers that assemble the computers

Refer to Figure 3-1. Using the graph above and beginning on D1, a shift to D2 would indicate a(n):

Increase in Demand

Refer to Figure 3-3. A change from Point A to Point B represents a(n):

Increase in Quantity Supplied

Refer to Figure 3-3. A change from Point A to Point D represents a(n):

Increase in Supply

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.

Law of Demand

______________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.

Price Floors

If new manufacturers enter the computer industry, then (ceteris paribus):

The supply curve shifts to the right.

In economics, the demand for a good refers to the amount of the good that people

Will buy at various prices