Economics Chapter 3
Expectation for higher prices in the future and technological advances that lead to an increase in production costs cause a ________ in supply.
decrease
If butter and popcorn are complements, then an increase in the price of butter will lead to a(n) ________ in the demand for popcorn.
decrease
If iPads are a normal good, than a fall in consumer income should lead to (a(n)) ______ in the demand for iPads.
decrease
If torrential rains wipe out this year's corn crop, this should lead to a(n) ________ in the supply of corn.
decrease
A technological innovation that reduces the cost of extracting natural gas from the earth's surface should ________ the price of natural gas and ________ the quantity of gas bought and sold in the market.
decrease; increase
As the price of a product increases, the quantity demanded _________, while the quantity supplied _________.
decreases, increases
A schedule or graph showing the quantity of a good that buyers wish to buy at each price is known as a ______ curve.
demand
If the price of books has gone down at the same time the number of books bought and sold at the markets, you can assume that the ______ for books has ________.
demand; decreased
Suppose that as the price of coffee increases, consumers purchase less coffee in part because they can no longer afford to buy as much coffee. The reduction in quantity demanded is known as the __________ effect of a price change.
income
The change in quantity demanded of a good that results because of a change in price changes the buyer's purchasing power is known as the ______ ______ of a price change.
income effect
A decrease in the price of a complement as well as an expectation of higher prices in the future will lead to a(n) ________ in demand.
increase
A medical breakthrough that decreases the cost of treating cancer should lead to a(n) ________ in the supply of cancer treatments.
increase
If Netflix and Hulu Plus are substitutes, an increase in the price of Netflix will lead to a(n) ________ in the demand of Hulu Plus. Hint: RIGHTWARD SHIFT IN DEMAND OF HULU PLUS
increase
If the price of butter increases, the quantity of butter supplied will ________ .
increase
A decrease in supply leads to a _________ shift in the supply curve.
leftward
Any good for which demand increases when income increases, and falls when income decreases but price remains constant, is a ______ good.
normal
The most John is willing to pay for a slice of pizza is $ 2.56. Therefore, $2.56 is John's ___________ _____ for a slice of pizza.
reservation price
A change in demand is represented by a
shift in the entire demand curve.
A change in supply is represented by a
shift in the entire supply curve.
A schedule or graph showing the quantity of a good that sellers wish to sell at each price is known as a ______ curve.
supply
When market price is above equilibrium price, there is usually excess ______. This gives sellers incentive to _____ their prices.
supply; lower
The market is in equilibrium when
the quantity supplied is equal to the quantity demanded.
A seller's reservation price is generally equal to
the smallest dollar amount for which a seller would be willing to sell an additional unit, as well as the marginal cost of producing another unit of the good.
An announcement that makes suppliers believe that gold prices are going to increase next month and a decrease in the number of companies that mine for gold would lead to a ________ in the current supply of gold.
decrease
An increase in the price of an input leads to a(n) ________ in supply.
decrease
A change in the quantity supplied is represented by
a movement along the supply curve.
Given that hops are important to the production of beer, a sharp increase in the price of hops should lead to a(n) _______ in the amount of beer being bought and sold at the market, as well as a(n) ________ in the price of beer.
decrease; increase
Technological advances that lower production costs and a decrease in costs of inputs in the production process lead to a(n) _______ in ______.
increase; supply.
A change in the quantity demanded is represented by a
movement along the demand curve.
Rent controls lead to
poorer maintenance of rent-controlled apartments and discrimination on tenants based on race, religion, and other personal factors.
A maximum allowable price specified by law is a ______ _______.
price ceiling
The equilibrium quantity is located where the
supply curve and demand curve intersect.
Suppose that as the price of movie tickets increases, people go to the movies less often and rent movies at home instead. The resulting reduction in the quantity of movies demanded is known as the _______ effect of a price change.
substitution
Given that college professors are an important input to the production of a college education, a decrease in the salaries of college professors should ________ the number of students attending college and ________ college tuition.
increase; decrease
