Upgrade to remove ads
Only ₩37,125/year
Review terms and definitions
Focus your studying with a path
Take a practice test
Get faster at matching termsHow do you want to study today?
Flashcards
Learn
Test
Match
Chapter 3
Terms in this set (45)
A market is any arrangement that brings together the buyers and sellers of a particular good or service.
True
Demand is the amount of a good or service that a buyer will purchase at a particular price.
False
The law of demand states that as price increases, other things being equal, the quantity of the product
demanded increases.
False
The law of diminishing marginal utility is one explanation of why there is an inverse relationship between price and quantity demanded.
True
The substitution effect suggests that, at a lower price, you have the incentive to substitute the more expensive product for similar products that are relatively less expensive.
False
There is no difference between individual demand schedules and the market demand schedule for a product.
False
In graphing supply and demand schedules, supply is put on the horizontal axis and demand on the vertical axis.
False
If price falls, there will be an increase in demand.
False
If consumer tastes or preferences for a product decrease, the demand for the product will tend to decrease.
True
An increase in income will tend to increase the demand for a product.
True
When two products are substitute goods, the price of one and the demand for the other will tend to move in the same direction.
True
If two goods are complementary, an increase in the price of one will tend to increase the demand for the other.
False
A change in the quantity demanded means that there
has been a change in demand.
False
Supply is a schedule that shows the amounts of a product a producer can make in a limited time period.
False
An increase in resource prices will tend to decrease supply.
True
A government subsidy for the production of a product will tend to decrease supply.
False
An increase in the prices of other goods that could be made by producers will tend to decrease the supply of the current good that the producer is making.
True
A change in supply means that there is a movement along an existing supply curve.
False
A surplus indicates that the quantity demanded is less
than the quantity supplied at that price.
True
If the market price of a product is below its equilibrium
price, the market price will tend to rise because demand
will decrease and supply will increase.
False
The rationing function of prices is the elimination of shortages and surpluses.
True
Allocative efficiency means that goods and services are being produced by society in the least costly way.
False
If the supply of a product increases and demand decreases, the equilibrium price and quantity will increase.
False
If the demand for a product increases and the supply of the product decreases, the equilibrium price will increase and equilibrium quantity will be indeterminate.
True
A price ceiling set by government below the competitive market price of a product will result in a surplus.
False
A schedule that shows the various amounts of a product consumers are willing and able to purchase at each price in a series of possible prices during a specified period of time is called
(a) supply
(b) demand
(c) quantity supplied
(d) quantity demanded
(b) demand
The reason for the law of demand can best be explained in terms of
(a) supply
(b) complementary goods
(c) the rationing function of prices
(d) diminishing marginal utility
(d) diminishing marginal utility
Assume that the
price of video game players falls. What
will most likely happen to the equilibrium price and quantity
of video games, assuming this market is competitive?
(a) Price will increase; quantity will decrease.
(b) Price will decrease; quantity will increase.
(c) Price will decrease; quantity will decrease.
(d) Price will increase; quantity will increase.
(d) Price will increase; quantity will increase.
Which
change will decrease the demand for a product?
(a) a favorable change in consumer tastes
(b) an increase in the price of a substitute good
(c) a decrease in the price of a complementary good
(d) a decrease in the number of buyers
(d) a decrease in the number of buyers
The income of a consumer decreases and the consumer's demand for a particular good increases. It can be
concluded that the
good is
(a) normal
(b) inferior
(c) a substitute
(d) a complement
(a) normal
Which of the following could cause a decrease in
consumer demand for product X?
(a) a decrease in consumer income
(b) an increase in the prices of goods that are good
substitutes for product X
(c) an increase in the price that consumers expect will
prevail for product X in the future
(d) a
decrease in the supply of product X
(b) an increase in the prices of goods that are good
If two goods are substitutes for each other, an increase
in the price of one will necessarily
(a) decrease the demand for the other
(b) increase the demand for the other
(c) decrease the quantity demanded of the other
(d) increase the quantity demanded of the other
(b) increase the demand for the other
If two products, A and B, are complements, then
(a) an increase in the price of A will decrease the demand for B
(b) an increase in the price of A will increase the demand for B
(c) an increase in the price of A will have no significant effect on the price of B
(d) a decrease in the price of A will decrease the demand for B
(a) an increase in the price of A will decrease the demand for B
If two products, X and Y, are independent goods, then
(a) an increase in the price of X will significantly increase the demand for Y
(b) an increase in the price of Y will significantly increase the demand for X
(c) an increase in the price of Y will have no significant effect on the demand for X
(d) a decrease in the price of X will significantly increase the demand for Y
(c) an increase in the price of Y will have no significant effect on the demand for X
The law of supply states that, other things being constant, as price increases
(a) supply increases
(b) supply decreases
(c) quantity supplied increases
(d) quantity supplied
(c) quantity supplied increases
A decrease in the supply of a product would most likely be
caused by
(a) an increase in business taxes
(b) an increase in consumer incomes
(c) a decrease in resource costs for production
(d) a decrease in the price of a complementary good
(a) an increase in business taxes
if the quantity supplied of a product is greater than
the quantity demanded for a product, then
(a) there is a shortage of the product
(b) there is a surplus of the product
(c) the product is a normal good
(d) the product is an inferior good
(b) there is a surplus of the product
If the price of a product is below the equilibrium price,
the result will be
(a) a surplus of the good
(b) a shortage of the good
(c) a decrease in the supply of the good
(d) an increase in the demand for the good
(b) a shortage of the good
Which would be the best example of allocative efficiency? When society devoted resources to the production
(a) slide rules instead of handheld calculators
(b)horse-drawn carriages instead of automobiles
(c) computers with word processors instead of typewriters
(d) long-playing records instead of compact discs
(c) computers with word processors instead of typewriters
A decrease in supply and a decrease in demand will
(a) increase price and decrease the quantity exchanged
(b) decrease price and increase the quantity exchanged
(c) increase price and affect the quantity exchanged
in an indeterminate way
(d) affect price in an indeterminate way and decrease
the quantity exchanged
(d) affect price in an indeterminate way and decrease the quantity exchanged
A decrease in supply and a decrease in demand will
(a) increase price and decrease the quantity exchanged
(b) decrease price and increases the quantity exchanged
(c) increase price and affect the quantity exchanged in an indeterminate way
(d) affect price in an indeterminate way and decrease the quantity exchanged
(c) increase price and affect the quantity exchanged in an indeterminate way
An increase in demand and a decrease in supply will
(a) increase price and increase the quantity exchanged
(b) decrease price and decrease the quantity exchanged
(c) increase price and the effect upon quantity exchanged will be indeterminate
(d) decrease price and the effect upon quantity exchanged will be indeterminate
(d) decrease price and the effect upon quantity exchanged will be indeterminate
An increase in supply and an increase in demand will
(a) increase price and increase the quantity exchanged
(b) decrease price and increase the quantity exchanged
(c) affect price in an indeterminate way and decrease
the quantity exchanged
(d) affect price in an indeterminate way and increase the quantity exchanged
(d) affect price in an indeterminate way and increase the quantity exchanged
A cold spell in Florida devastates the orange crop.
As a result, California oranges command a higher price. Which of the following statements best explains the
situation?
(a) The supply of Florida oranges decreases, causing
the supply of California oranges to increase and their
price to increase.
(b) The supply of Florida oranges decreases causing their price to increase and the demand for California oranges to increase.
(c) The supply of
Florida oranges decreases, causing the supply of California oranges to decrease and their price to increase
(d) The demand for Florida oranges decreases, causing a greater demand for California oranges and an increase in their price.
(b) The supply of Florida oranges decreases causing their price to increase and the demand for California oranges to increase.
28. A maximum price set by the government that is
designed to help consumers is a
(a) price ceiling
(b) price floor
(c) shortage
(d) surplus
(a) price ceiling
Recommended textbook solutionsPrinciples of Microeconomics
7th EditionN. Gregory Mankiw
830 solutions
Principles of Microeconomics
8th EditionN. Gregory Mankiw
796 solutions
Principles Of Microeconomics
7th EditionN. Gregory Mankiw
830 solutions
Economics
4th EditionJ. Holton Wilson, J.R. Clark
890 solutions
Sets with similar termsMacroeconomics Chapter 3 Multiple Choice
19 terms
laurenkwilhelm
Macroeconomics Chapter 3
54 terms
mjoumas1
Econ 121 2
55 terms
Gorgeous-Rex
Sets found in the same folderECON 201 Chapter 3 & 4
21 terms
moses_mosesXD
Econ ch 3
55 terms
kmp5
Econ Chapter 1 - 3: Practice Test
30 terms
JillianWoodard
Small Test - Economics EOC (GSE) UPDATED Domain:…
125 terms
joshua_jihoon_park
Stock Patterns
159 terms
jwohlin2PLUS
Map quiz
43 terms
jwohlin2PLUS
business law important terms
160 terms
jwohlin2PLUS
Business law terms
205 terms
jwohlin2PLUS
Verified questions
ECONOMICS
The percentage of people in a particular group who live in households below the official poverty threshold _____
Verified answer
ECONOMICS
The recent college graduates who created Instragram, a free photo-sharing application for smartphones, did so because they saw a need for people quickly to upload and share their photos online. Within two years they sold Instagram to Facebook for a billion dollars. Would you say that they were exhibiting entrepreneurship? Explain your answer.
Verified answer
ECONOMICS
What two programs are financed by FICA? Refer to your completed cluster diagram.
Verified answer
ECONOMICS
You are organizing a lemonade stand for a club's fund-raising event. You have recruited volunteers to work the booth. The club will provide: tables, tablecloths, and two large signs. You have paid $150 to rent the space for your booth. You have ordered 1,000 lemons for$200--enough for 1,000 cups of lemonade, which will sell for $1.00 per cup. The vendor can deliver more as you need them, but you can't return those you've already accepted. You have purchased 2,000 paper cups for$100. Miscellaneous items cost an additional $100. a. What are the variable costs in this enterprise? The fixed costs? b. What will be your break-even point if you do not order additional lemons? c. At what point will you maximize profits? d. How does this fund-raising event differ from a for-profit business?
Verified answer
Other Quizlet setsMacro Chapter 3 Quiz Study Guide T/F
24 terms
SVC_2021
Macroeconomics Quiz 2
25 terms
brianna_scott9
Demand
17 terms
Daniel_Dow3PLUS
Macro quiz 2
35 terms
jessica_pendrick
Related questionsQUESTION
Suppose an individual is allocating income over two goods such that MUx/Px < MUy/Py. The consumer can increase total utility by purchasing:
13 answers
QUESTION
Joe's Garage operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $20, AVC = $15, and the price per unit is $10. In this situation,
15 answers
QUESTION
37) In a perfectly competitive market, a permanent increase in demand initially brings a higher price, economic
3 answers
QUESTION
a firm is producing 1000 units at a total cost of $5000. If it were to increase production to 1001 units, its total cost would rise to $5008. What does this information tell you about the firm?
5 answers