Econ ch. 3
Increases and demand curve shifts rightward
If the price of a good is expected to rise in the future, the opportunity cost of buying now is lower than in the future and the demand...
Greater, rise
If there is a shortage of a good, the quantity demanded is ____ than the quantity supplied and the price will ____
Minimum supply price curve
In addition to showing the quantity that will be supplied at different prices, a supply curve is also a...
Yes if both the demand and the supply of the good increase by the same amount
Is it possible for the price of a good to stay the same while the quantity increases?
Market equilibrium
Neither buyers nor sellers can do business at a better price
Equilibrium price
Only at this price does price not change
Increases, increases
Pizza and hamburgers are substitutes for consumers. A rise in the price of pizza ______ the equilibrium price of a hamburger and _______ in the equilibrium quantity of hamburgers
Demand curve shifts
Prices rise/fall of: related goods, future prices, income, expected future income and credit, population, preferences
Demand
Relationship between the price of a good and the quantity demanded
The supply curve shifts
Rise/fall in: prices of factors of production, prices of related goods, expected future prices, number of suppliers, technology, the state of nature
Demand curve
Shows the relationship between the quantity demanded of a good and its price, everything else remaining the same
Supply curve
Shows the relationship between the quantity supplied and the price of the good
Rightward shift in the supply curve
Supply increases for any reason causes a...
Quantity of demand
The amount that consumers plan to buy during a given times period at a particular price
Quantity supplied
The amount that producers plan to sell during a given time period at a particular price
Lower quantity demanded
The higher the price of a good or service...
Decreases and creates movement along the demand curve for golf balls
The law of demand concludes that the rise in the price of a golf ball ______ the quantity demanded and ______
Money price of a good
The number of dollars that must be given up
Increase, decrease
The number of firms producing computer memory chips decreases. As a result, the price of memory chips ___ and the quantity of memory chips ___
Equilibrium price
The price at which the quantity demanded equals the quantity supplied. Determined by the intersection of the demand and supply curves
Supply of airplane trips derease
The price of jet fuel rises what is the effect on airplane trips....
Equilibrium quantity
The quantity bought and sold at the equilibrium price
Relative price
The ratio of one money price to another determined by the demand and supply of a good
Supply
The relationship between the quantity supplied and the price of the good
Complements
The rise in the price of gasoline decreases the demand for large cars which means gasoline and large cars are _______
Change in demand
A shift in the demand curve occurs when any factor that influences buying plans changes, other that the price of the good
Decreases, increases
A technological improvement lowers the cost of producing coffee. The technological improvement ____ the equilibrium price of a pound of coffee and _____ the equilibrium quantity of coffee
Law of supply
All other things remaining the same: the higher the price of a good, the greater is the quantity supplied and the lower the price of a good, the smaller is the quantity supplied
Law of demand
All other things remaining the same: the higher the price of a good, the smaller is the quantity demanded and the lower the price of a good , the greater is the quantity demanded
Increases supply and the supply curve shifts rightward
An advance in technology...
Rise
An increase in demand and a decrease in supply causes the equilibrium price to...
Increases demand and shifts the demand curve rightward
An increase in income for a normal good...
Decreases demand and shifts the demand curve leftward
An increase in income for an inferior good...
Increases demand and shifts the demand curve rightward
An increase in population...
Shifts supply curve rightward
An increase in supply...
Increase, rightward
An increase in the number of producers of gruel ______ the supple of gruel and shifts the supply curve of gruel ____
Increases supply and the supply curve shifts rightward
An increase in the number of suppliers...
Leftward, not at all
An increase in the price of the cheese used to produce pizza shifts the supply curve of pizza ______ and shifts the demand curve for pizza _______
Decreases supply and shifts the supply curve leftward
A rise in the price of a substitute in production...
increases demand and shifts the demand curve rightward
A rise in the price of substitutes...
Decreases and the supply curve shifts leftward
If the price is expected to rise in the future, the current supply...
Decreases supply and shifts the supply curve leftward
A rise in the price of a factor of production used to produce the good...
Increase in supply
A rightward shift of the supply curve which decreases P and increases Q
increases supply and the supply curve shifts rightward
A rise in the price of a complement in production...
Decreases demand and shifts the demand curve leftward
A rise in the price of a complement...
Change in the quantity supplied and movement along the demand curve
A change in the price of a good leads to...
Change in quantity demanded
A change in the price of the good or service leads to __________ and a movement along the demand curve.
Shifts supply curve leftward
A decrease in supply...
Law of supply
A fall in the price of a food leads producers to decrease the quantity of the good supplied. This statement reflects...
Substitution effect
A higher relative price raises the opportunity cost of buying a good, so people buy less of it
Income effect
A higher relative price reduces the amount of goods people can buy. Usually this effect decreases the amount people buy of the good that rose in price
Decrease in demand
A leftward shift of the demand curve which lowers P and decreases Q
Decrease in supply
A leftward shift of the supply curve which raises P and decreases Q
Competitive market
A market that has many buyers and sellers, so no single buyer or seller can influence the price
Increase in demand
A rightward shift of the demand curve which raises P and increases Q
Quantity supplied equals quantity demanded
If the market for Twinkies is in equilibrium, then...
Decrease in demand
Demand curve shifts leftward
Increase in demand
Demand curve shifts rightward
Demand, rightward
Demand for wheat rises and the quantity increases causes _____ curve to shift _____
Normal good
Demand increases when income increases for this kind of good
Increase
Expected future income increases or when credit is easy to obtain current demand might...
Decrease
Fewer people want to read less books causes the equilibrium quantity of books to...
Demand curve leftward
Fewer people want to read paper back books shifts the...
Increases supply and the supply curve shifts rightward
Good states of nature, such as good growing season for an agricultural good or cloudless days for solar energy plants...
Surplus
Happens at prices above the equilibrium price which causes the price to fall
Shortage
Happens at prices below the equilibrium price which causes the price to rise
It raises price and increases quantity
How does an unusually cold winter affect the equilibrium price and equilibrium quantity of antifreeze?
Increases and shifts the demand curve rightward
If people like a good more demand...
Change in supply and shift of the supply curve
When any factor that influences selling plans other than the price of the good changing there is...
Ambiguous
When both the demand and supply curves shift, the effect on the price or quantity can be determined, but without the information about the relative sizes of the shifts, the effect is...
