Eco Chapter 3

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.

Which of the following is the correct way to describe equilibrium in a market?

At equilibrium, quantity demanded equals quantity supplied

A movement along the demand curve for toothpaste would be caused by

a change in the price of toothpaste

If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decreases economists would describe this as

a decrease in quantity demanded.

Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase?

a decrease in the price of corn

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

a decrease in the price of flour

Holding everything else constant, an increase in the price of MP3 players will result in

a decrease in the quantity of MP3 players demanded.

The phrase "demand has increased" means that

a demand curve has shifted to the right

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is

a normal good

Which of the following will not shift the demand curve for a good?

an increase in the price of the good

If a decrease in income leads to an increase in the demand for macaroni, then macaroni is

an inferior good

at a product's equilibrium price

any buyer who is willing and able to pay the price will find a seller for the product.

The law of demand implies, holding everything else constant, that

as the price of bagels increases, the quantity of bagels demanded will decrease.

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result

both the equilibrium price and quantity of MP3 players will increase.

a supply schedule

is a table that shows the relationship between the price of a product and the quantity of the product supplied.

The substitution effect of a price change refers to

the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.

If a firm expects that the price of its product will be higher in the future than it is today

the firm has an incentive to decrease supply now and increase supply in the future

The income effect of a price change refers to the impact of a change in

the price of a good on a consumer's purchasing power.

If in the market for apples the supply has decreased then

the supply curve for apples has shifted to the left

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline,

the supply curve shifted to the left resulting in an increase in the equilibrium price.

The demand for lobster is lower in the spring than in the summer. If the price of lobster is higher in spring than in summer then

the supply of lobster is greater in summer than in spring.

An increase in the equilibrium price for a product will result

when there is a decrease in supply and an increase in demand for the product.