mac ch 3

The willingness and ability of a consumer to buy a normal product falls because of ______.

a fall in income

All of the following illustrate a market, except ______.

a farmer sharing his surplus wheat with neighbors

International participants participate in the product market by _____.

demanding exports supplying imports

IWhich of the following would most likely lead to a decrease in demand?

A decrease in the number of buyers

Which of the following would most likely lead to a decrease in demand?

A decrease in the number of buyers

______ in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity.

A shift leftward A decrease

Which one of the following best clarifies the ceteris paribus assumption?

All variables except those under immediate consideration are held constant for a particular analysis.

Which of the following statements are true? Select all that apply.

Consumers expect the price of shrimp to increase in the future, therefore the equilibrium price and quantity increase now. Recently, the popularity of 3 -D television increased significantly, therefore the equilibrium price and quantity of 3-D television also increased. The price of Coke increased, therefore the equilibrium price and quantity of Pepsi increased.

_______ reflects a compromise between buyers and sellers. In other words, no other compromise yields a quantity demanded that's exactly equal to the quantity supplied.

Equilibrium

Which of the following will cause a change in supply rather than a change in quantity supplied?

Expectations Factor costs Technology Taxes

The three main decisions that must be addressed by an economic system include ______.

FOR WHOM output is produced WHAT goods and services to produce HOW output is produced

True or false: A market shortage occurs when quantity supplied exceeds quantity demanded.

False

True or false: Changes in the determinants of demand will cause a movement along the demand curve.

False

True or false: In the supply and demand model, quantity demanded is illustrated on the vertical axis, while price is illustrated on the horizontal axis.

False

True or false: The market supply curve is derived by summing up the producers' individual demand curves for a good or service.

False

The three main decisions that must be addressed by an economic system include ______

HOW output is produced FOR WHOM output is produced WHAT goods and services to produce

Which basic economic question asks about the way in which goods are produced?

How?

_______ is the total quantities of a good or service people are willing and able to buy at alternative prices in a given time period.

Market demand

_______ represents the combined demands of all market participants.

Market demand

_______ is the total quantities of a good that sellers are collectively willing and able to sell at alternative prices in a given time period, ceteris paribus.

Market supply

_______ is the amount by which the quantity supplied exceeds the quantity demanded at a given price.

Market surplus

Which of the following are determinants of demand?

Number of buyers Prices of related goods Consumer expectations Consumer tastes Consumer income

Which of the following are determinants of supply?

Taxes and subsidies Technology Factor costs

Which of the following defines ceteris paribus?

The idea that factors other than those being considered in a particular analysis do not change.

What determines market price and equilibrium output in a market?

The interaction of buyers and sellers

True or false: A market surplus occurs when quantity supplied exceeds quantity demanded.

True

True or false: Equilibrium price is the price at which the quantity of a good demanded in a given time period equals the quantity supplied.

True

True or false: Specialization occurs in situations where we can, but choose not to, produce everything we need or desire.

True

True or false: To determine total demand, we add the separate demands of all individual consumers in the market.

True

A decrease in demand while holding supply constant results in _______.

a decrease in both equilibrium price and quantity

Which of the following are examples of a market?

amazon.com The New York Stock Exchange a local gas station a pay-to-play online gaming site

Other things equal, the fundamental characteristic of supply is ______

as price falls, the quantity supplied falls

Other things equal, the fundamental characteristic of supply is ______.

as price falls, the quantity supplied falls

there must be a ___ and a ___ in every market transaction.

buyer, seller

TConsider the relationship between the price of gas and the quantity of gas consumed by drivers. If we are to consider the price of gas as the only factor affecting the quantity of gas consumed, while holding other factors such as drivers' incomes and tastes and preferences irrelevant, then we are invoking ______.

ceteris paribus

The equilibrium price will _______ whenever the supply or demand curve shifts.

change

In the circular flow model, businesses will buy factors from and sell products to _______.

consumers

The majority of participants in markets are

consumers.

In the circular flow model, the market economy creates

continuous, repetitive flows of goods and services, and factors.

All of the following are the determinants of demand, except:

cost of inputs in production

A demand _______ is a graphical illustration of a demand schedule.

curve

Other things equal, if consumers believe that the price of gas will fall tomorrow, the demand for gas today will likely ______.

decrease

An increase in supply while holding demand constant results in a(n) ______ in equilibrium price, but a(n) ______ in equilibrium quantity.

decrease, increase

An increase in supply while holding demand constant results in a(n) ______ in equilibrium price, but a(n) ______ in equilibrium quantity. Multiple choice question.

decrease, increase

An unfavorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______.

decrease; left

According to the law of ___________ the quantity of a good demanded in a given time period increases as its price falls, ceteris paribus.

demand

At the equilibrium price, the quantity of a good________equals the quantity supplied

demand

Change in the number of buyers is a determinant of market

demand

The ability and willingness to buy specific quantities of a good at alternative prices in a given time period, ceteris paribus, is the definition of

demand

A table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus, is a ______.

demand schedule

A market shortage results from an excess of quantity _______ over quantity_________ at a given price.

demand, suply

The________rice and quantity reflect a compromise between buyers and sellers. In other words, no other compromise yields a quantity demanded that is exactly equal to the quantity supplied.

equilibrium

Factors of production, such as land and capital, are exchanged in ______ markets.

factor

Using the circular flow diagram, both land and labor would be bought and sold in the ______ market.

factor

The economic question of '______ to produce' is about decisions related to who is going to consume the goods and services produced.

for whom

Knowing who the participants are in markets is _____ to understanding how they work.

helpful

When consumers purchase a good or service, they do so in order to ______ their level of utility or satisfaction.

increase

A(n) ______ in demand while holding supply constant ______ equilibrium price and ______ equilibrium quantity.

increase; raises; raises

The law of demand states that the quantity of a good demanded in a given time period ______ as its price falls, ceteris paribus.

increases

The supply curve is an upward-sloping curve because as price ______, the producer will be willing to supply ______ of the product.

increases; more

The supply curve is an upward-sloping curve because as price ______, the producer will be willing to supply ______ of the product. Multiple choice question.

increases; more

At a market's equilibrium price, every seller who wished to make a sale was able to do so. Yet, some sellers left the market without making a sale because they viewed the price as being too:

low.

If the market price is above equilibrium, a _______ exists and there will be downward pressure on the price until it reaches equilibrium.

market surplus

Other things equal, firms will produce and offer for sale ______ of their product at a high price than at a low price.

more

On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______.

movement along the supply curve, shift of the supply curve

Decide which of the following are Determinants of Demand and which are Determinants of Supply. Pages 51 - 52 and 57 from the Required Course Textbook and CH 3 Supplemental Handout #4 should be helpful to you. Group of answer choices

number of buyers in market: subsidies paid to producers: consumer income: texas places on produces:

The economic interactions we have as individuals with others are necessitated by all of the following except

our desire to fit in with the other members of society.

The only factor that causes a movement along the supply curve is _____.

price

Specialization is about an individual or firm using available resources to:

produce one or only a few goods and services

A ______ market is any place where finished goods and services are bought and sold

product

The function of businesses in the circular flow model is to ______ factors and ______ products.

purchase; sell

A change in ______ refers to a movement along the demand curve in response to changes in the price of a good or service, whereas a change in ______ refers to a shift of the demand curve leftward or rightward in response to anything other than changes in the price of a good or service

quantity demanded, demand

An increase in the price of Coke will change the ________ for Coke, whereas an increase in the price of Pepsi will change the ______ for Coke.

quantity demanded, demand

decrease, increase

raises, reduces

The two dimensions associated with every arrow depicted in the circular flow diagram involve a _____ flow and a _____ flow.

real, monetary

A change in demand is represented by a ______ the demand curve while a change in quantity demanded is represented by a _______ the demand curve.

shift of, movement along

A change in supply is represented by a ______ the supply curve while a change in quantity supplied is represented by a _______ the supply curve.

shift of, movement along

A market surplus is also known as excess ______.

supply

Market_______is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.

supply

International participants participate in the factor market by _____.

supplying resources demanding resources

International participants participate in the factor market by _____. (Remember to select all correct answers.)

supplying resources demanding resources

The determinants of demand include

tastes income expectations

The determinants of demand include (select all that apply) ______.

tastes income the availability and prices of other goods expectations

Which of the following are determinants of supply?

taxes subsidies

Which of the following curves shows the quantities of a product that will be purchased at various possible prices, other things equal?

the demand curve

The participants involved in the circular flow model are:

the government, consumers, businesses, and international participants

A consumer's willingness to purchase in a market must be supported by the ability to make the purchase as evidenced by ______.

the necessary income

The market supply curve for a good is ______.

the summation of all the individual supply curves for the good

Equilibrium price and equilibrium quantity occur where ______.

the supply curve intersects the demand curve

Every arrow depicted in the circular flow diagram actually has _____ dimensions.

two

The goal of consumers is to maximize:

utility

In the supply and demand model, price appears on the _______ axis.

vertical

Demand only exists if someone is:

willing and able to pay for the good.