Microeconomic Ch4
For the given graph, the equilibrium price is _____ and the equilibrium quantity is _____.
$18; 6 units
For the given graph, the equilibrium price is ____ and the equilibrium quantity is ____.
$8; 15 units
Which phenomena underlie the law of demand for the market?
-At lower prices, new demanders enter the market. -At lower prices, existing demanders buy more.
A change in which of the following can shift the demand curve for a good?
-Taxes paid by and subsidies paid to the consumers -Tastes and preferences of the consumers -Expectations of the consumers about the future price of the good
Which of the following can shift the demand curve for a good?
-The price of another good rises. -The income of the consumers falls
The law of supply states that quantity supplied?
-falls as price falls. -rises as price rises.
Demand for a good could change if the?
-income of the consumers changes. -price of another good changes.
The law of supply is based on the fact that a firm can readjust its activities to supply?
-less of a good if its price falls. -more of a good if its price rises.
Supply shifts with a change in:
-production technology. -expectations of sellers. -the price of inputs for the good.
The law of demand states that the quantity demanded
-rises as price falls. -falls as price rises.
At a price of $10, the quantity supplied is
20 units.
At a price of $6, the quantity demanded will be?
20 units.
Suppose a market has an excess supply and price starts to fall. What is likely to happen to quantity demanded and supplied?
A fall in quantity supplied and a rise in quantity demanded.
An increase in quantity demanded is represented by a movement from
B to A.
An increase in quantity supplied is best represented by a movement from
B to A.
An increase in demand is represented by a movement from?
C to D.
True or false: A change in the price of a good causes a shift in the demand curve.
False
True or false: Equilibrium is preferable to disequilibrium.
False
True or false: Excess demand is the amount by which quantity supplied exceeds quantity demanded.
False
When we consider the labor market for the entire United States, we can assume that changes in demand and supply are independent of one-another.
False
In which of the following markets will the fallacy of composition be most important to consider?
The U.S. labor market
Why do prices tend to be in equilibrium where supply and demand intersect?
The forces that push down on price and the forces that push up on price are about equal.
In the graph, which of the following represents excess supply?
The quantity supplied at A minus the quantity demanded at B
Which of the following does not result in a shift of your supply curve for labor?
The wage that you earn doubles.
True or false: Equilibrium is not preferred to disequilibrium.
True
True or false: Equilibrium is the concept in which opposing dynamic forces cancel each other out.
True
True or false: Excess supply is the amount by which quantity supplied exceeds quantity demanded.
True
True or false: The fallacy of composition is important to remember when doing macroeconomic analysis.
True
True or false: The supply/demand model is not a good model to apply to macroeconomics.
True
The movement from D to C represents?
a decrease in demand.
The movement in this graph from point A to B shows?
a decrease in quantity supplied.
The shift of the supply curve shown in the figure could be due to? (supply curve shifts to the right)
a subsidy on the production of the good.
The shift of the supply curve shown in the figure could be due to?
a tax levied on the producer of the good.
To create a market demand curve?
add quantities demanded of all individuals in the market at every price.
The shift of the supply curve shown in the figure could be due to? (supply curve shifts to the right)
an improvement in technology.
The shift of the supply curve shown could be due to?
an increase in the price of inputs.
A change in the amount demanded from A to B could be due to?
an increasing consumer preference for the good.
The law of demand is based on the observation that if the price of a good rises...
consumers will substitute a relatively cheaper good.
The law of supply states that the quantity supplied of a good is?
directly related to the good's price.
The demand curve is generally?
downward sloping because as price rises, quantity demanded tends to fall.
At a price of $5, there is:
excess quantity supplied of 6 units.
When there is excess supply for a good, prices tend to?
fall
The false assumption that what is true for a part will also be true for the whole is called the
fallacy of composition.
A market demand curve is the?
horizontal sum of all individual demand curves.
A market supply curve is the?
horizontal sum of all individual supply curves.
The law of supply is based on the fact that a firm will want to supply?
more of a good when its price rises because the opportunity cost of not supplying the good has risen.
When the wage rate paid to labor in a particular sector is below equilibrium, the?
number of workers seeking jobs exceeds the number of jobs available in that sector.
A movement along a demand curve can be caused by a change in the?
price of the good.
To calculate market supply add?
quantities supplied at every price.
Excess demand is the amount by which:
quantity demanded exceeds quantity supplied.
When price rises?
quantity demanded tends to fall.
The law of demand states that a rise in price will cause?
quantity demanded to fall.
A movement along the demand curve reflects a change in?
quantity demanded.
If the price of candy falls, the?
quantity of candy demanded will rise.
If the price of shoes rises, the?
quantity of shoes demanded will fall.
Excess supply is the amount by which?
quantity supplied exceeds quantity demanded.
According to the law of supply, when the price of shoes rises the?
quantity supplied will rise.
When there is excess demand for a good, prices tend to?
rise.
A change in a factor other than price that affects demand leads to a?
shift in demand.
The law of demand is based on the concept of?
substitution.
In the real world, we would expect that quantity?
supplied and quantity demanded might, but often won't, be equal.
At a price of $24, there is an excess?
supply of 4 units. - at $24 quantity supplied is 8 and quantity demanded is 4. excess supply of 4 units
When supply decreases?
the entire supply curve shifts to the left.
The shift of the demand curve from D0 to D1 in the given figure could be due to?
the imposition of a tax on the good.
According to the law of supply, when the price of candy rises?
the quantity supplied will rise.
A typical supply curve is?
upward sloping.
Supply tells us how much will be bought at
various prices.
The fallacy of composition is the false assumption that?
what is true for a part will also be true for the whole.
