Micro ch 4

The law of supply states that other things remaining the same, a decrease in the price of kayaks leads to,

a decrease in the quantity of kayaks supplied

An increase in the number of pineapple growers results in

an increase in the supply of pineapples and a rightward shift in the supply curve

A market is defined as

any arrangement that brings buyers and sellers together

Complement in production

is a good that is produced along with another good -The supply of a good increases if the price of one of its complements in production rises -The supply of a good decreases if the price of one of its complements in production falls

Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco chips?

it decreases the demand for taco chips

a downward slope of the demand curve

represents the law of demand

If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will_____ and the equilibrium quantity of electricity will ______

rise, increase

If a freeze destroys oranges before they are harvested, the equilibrium price of an orange______ and the equilibrium quantity______

rises, decreases

Consider the market for cell phones. What shifts the demand curve leftward?

studies showing using cell phones can cause brain cancer

Wheat is used to produce cereal. When the price of wheat falls the

supply of cereal increases

market equilibrium occurs when

the quantity demanded equals the quantity supplied

A shortage occurs when

the quantity demanded exceeds the quantity supplied -price rises

A surplus occurs when

the quantity supplied exceeds the quantity demanded -price falls

The Law of Supply

-If the pice of a good rises, the quantity supplied of that good increases -If the price of a good falls, the quantity supplied of that good decreases

The Law of Demand

-If the price of the good rises, the quantity demanded of that good decreases - If the price of the good falls, the quantity demanded of that good increases

A substitute is

A good that can be consumed in place of another good -The demand for a good increases if the price of one of its subs rises -The demand for a good decreases if the prices of one of its subs falls

Substitute in production

A good that can be produced in place of another good -The supply of a good increases if the price of one of its subs in production falls -The supply of a good decreases if the price of one of its subs in production rises

A complement is

A good that is consumed with another good -The demand for a good increases if the price of one of its complements falls -The demand for a good decreases if the price of one of its complements rises

If the automobile workers' union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles?

The supply decreases

Price of gasoline increases during the summer months because?

There is increased driving by families going on vacation

An inferior good is

a good for which the demand decreases if income increases and demand increases if income decreases

A normal good is

a good for which the demand increases if income increases and demand decreases if income decreases

if the demand for digital cameras increases when consumers' income rises, then digital cameras are

a normal good

Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are

complements in production