ECON Chapter 3 Smartbook questions
In the marketplace, what is a good that is used together with another good?
A complementary good.
Which of the following statements are true?
A decrease in consumers' income would decrease the demand for a normal good. An increase in the price of a normal good would decrease the quantity demanded of the good.
Which of the following would most likely lead to a decrease in demand?
A decrease in the number of buyers.
In which of the following cases the demand for a normal good would likely increase? (Check all that apply.)
A decrease in the price of complementary goods. An increase in the number of buyers.
Which of the following refers to government financial assistance for the production of a good which lowers producers' costs and increases supply?
A subsidy.
In the marketplace, what is a good that can be used in place of another good called?
A substitute good.
Which statement about demand and supply is true?
An increase in consumer income is likely to increase the demand for a normal good.
Which of the following exemplifies a change in buyers' tastes?
An increase in demand for digital cameras over 35mm cameras.
Which of the following is likely to cause an increase in the demand for a good or service?
An increase in the number of buyers.
In which of the following cases the demand for a normal good would likely increase? (Check all that apply.)
An increase in the number of buyers. A decrease in the price of complementary goods.
Which of the following factors increase the demand for any good or service?
An increase in the number of buyers. An increase in the price of a substitute good. A rise in consumer income if the product is a normal good.
How do improvements in productive technology enable firms to produce more units of output?
By utilizing fewer resources, thereby lowering costs.
Which exemplifies a pair of substitute goods?
Hot dogs and hamburgers.
Which of the following is a determinant of demand?
Income.
In general, what goals does the improvement of production techniques help companies to achieve?
Increase supply. Use fewer resources per unit of output. Lower production costs.
What are two goods called when a change in the price of one good has little or no effect on the demand for the other?
Independent goods.
Which of the following would increase the demand for goods and services in the United States?
Large-scale immigration.
Which of the following are determinants of demand?
Number of buyers. Consumer tastes. Consumer expectations. Consumer income. Prices of related goods.
Which of the following exemplify a decrease in the demand for goods due to a decrease in the number of buyers?
People leaving the small towns where they grew up to look for job opportunities. People retiring and leaving the cities where they worked.
Which of the following are determinants of supply?
Producer expectations. Taxes and subsidies. Prices of other goods.
Which of the following types of goods affect the demand for another product due to a change in their price? (Select all that apply)
Substitute goods. Complementary goods.
Which of the following are determinants of supply? (Check all that apply.)
Technology. Taxes and subsidies. Resource prices.
Which of the following specifically refers to demand?
The buyer side of any market.
What determines market price and equilibrium output in a market?
The interaction of buyers and sellers.
Which are reasons for changes in buyer tastes?
The introduction of products. The results of health studies. The development of new technology.
True or false: Resource costs or changes in these costs to production are responsible for shifts in the supply curve.
True
True or false: The law of demand can be supported by the income effect.
True
True or false: When the price of one product rises, the demand for its substitute will increase.
True.
Which of the following illustrate the relationship between a good and its complement? (Check all that apply.)
When the price of lettuce increases, the demand for salad dressing decreases. When the price of tuition decreases, the demand for textbooks increases.
The inverse relationship between price and quantity demanded can be graphically illustrated by ______.
a downward sloping curve.
The willingness and ability of a consumer to buy a normal product falls because of ______.
a fall in income.
The rationing function of prices refers to the ability of the competitive forces of supply and demand to establish a price at which ______.
buying and selling decisions are consistent.
A ______ good is one that is used together with another good.
complementary
The concept of demand can be summarized by a schedule or curve showing the quantity of a product that would be ______.
consumed at various possible prices.
The ______ incurred by firms when producing a good or service arise from the prices of the inputs that are used to produce said good or service.
costs of production
When the price of a product falls, demand for its substitute will _______.
decrease.
An unfavorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______.
decrease; left.
A change in the number of buyers is a determinant of market ______.
demand.
The inverse, or negative, relationship between price and quantity demanded is known as the law of ______.
demand.
Consumers experience ______ marginal utility the more they consume of a particular good or service.
diminishing
A favorable change in consumer tastes and preferences for a product will ______ demand, shifting the demand curve to the ______ (right/left).
increase, right.
If the birthrate increases, the purchase of baby products is likely to ______.
increase.
The vast majority of goods that are not related to one another are called ______ goods.
independent
A demand curve shows the ______.
inverse relationship between price and quantity demanded for a product.
The income effect indicates that a ______ price increases the purchasing power of income, enabling consumers to purchase ______ of a product and vice versa.
lower; more
On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______.
movement along the supply curve; shift of the supply curve.
Other things equal, when price falls, the quantity demanded rises. This represents the ______ relationship between the price and quantity demanded.
negative, or inverse,
The determinants of the supply of a good are any factors other than the product's ______ that cause the supply curve of the good to shift.
price
All the following are the determinants of demand except ______.
price of substitutes in production.
The production of a good or service in the least costly way is known as ______ efficiency.
productive
The price of ______ goods is a determinant of demand.
related
The prices of the ______ used in the production process help determine the costs of production incurred by firms.
resources
If prices of a good or service are expected to increase in the future, the demand for that good or service will ______ today. If prices are expected to decrease in the future, demand will ______ today.
rise, fall
A change in demand is represented by a ______ the demand curve while a change in quantity demanded is represented by a _______ the demand curve.
shift of, movement along
The supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis.
supplied, price
Market ______ is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.
supply
The prices of substitute goods in production is a determinant of ______.
supply.
The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called ______.
the rationing function of prices.
Diminishing marginal ____ states that, in any specific time period, buyers will derive less satisfaction from each additional unity of the product consumed.
utility