Economics CH2
A supply curve that is upward sloping means that:
suppliers will want to sell more at higher prices
The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:
demand
When economists study the behavior of buyers, they are studying:
demand
Consumer preferences, prices of related goods, income, and demographic characteristics are often termed:
demand shifters
If the price in the market for a commodity is above the market equilibrium price, the:
quantity supplied exceeds the quantity demanded
The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?
The equilibrium price and quantity fall
The price of oranges rises. What happens in the market for apples, which are a substitute for oranges?
The equilibrium price and quantity rise
Two goods are substitutes if:
an increase in the price of one leads to an increase in demand for the other
The law of demand is illustrated when:
an increase in the purchases of personal computers results from lower prices
A shift of a demand curve to the right, all other things unchanged, will:
increase equilibrium price and quantity
If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:
is below the market equilibrium price
Which of the following would shift the demand curve for new textbooks to the right?
An increase in college enrollments
A substantial increase in the price of oranges (a normal good) is likely to result from:
a prolonged freeze in Florida
Demand and supply curves are drawn assuming ceteris paribus. This means that:
all other things besides price and quantity are assumed unchanged
Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:
an increase in price and quantity
A decrease in supply is caused by:
an increase in returns from other alternative activities
A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:
supply curve
Factor prices, returns from alternative activities, technology, number of firms, producer expectations, and natural events are often termed:
supply shifters
An example of a supply shifter is:
technology
The intersection of the supply and demand curves indicates:
the equilibrium solution in the market
A shift in the demand curve to the left, all other things unchanged:
will cause a movement downward along the supply curve and a lower equilibrium quantity
