Unit 1 Chapter 3
A change in price of a good or service typically causes ___________________________ for that specific good or service.
A change along the demand curce
Andy
Andys demand for beer
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
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________
A shortage
Any given demand or supply curve is based on the ceteris paribus assumption that ___
All else is held equal
The nature of deman indiciated that as the price of a good increases
Buyers desire to purchase less of it.
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right
Costs of production fall
The ____ is the only price where quantity is equal to quantity suppllies
Equilibrium price
Which of the following would reduce the supply of microcomputers?
Higher wage rated for the workers that assemble the computers.
Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.
Law of demand
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:
NOT: A movement down along the demand curve for beef to the right.
A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________
NOT: Demand curve to the left
If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:
NOT: Goods X and Y are substitute goods
The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases
Price, quantity demanded
A demand curve shows the relationship between price and _________________ on a graph.
Quantity demanded
_____ refers to the total number of units that are produced at that price.
Quantity demanded
When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________.
Quantity supplies
A severe freeze
The supply curve
Nearly all supply curves share a basic similarity: they slope _______________
Up from left to right
In economics, the demand for a good refers to the amount of the good that people:
Will buy at various prices