Microeconomics- Unit 3 Supply and Demand

The quantity demanded for an item is the amount of that good or service consumers are willing and able to buy at a specific price during a specific time period, with which of the following important qualifications?

Price, time period, ability of consumers to buy, and willingness of consumers to buy all affect _____.

True or false. Referring to the graph below, if a bad cold and flue season increases demand for orange juice, this would shift the demand curve from D0 to D1.

Line D0 shifts up and to the right when moved to D1.

The amount of a good or service sellers are willing and able to sell at a specific price during a certain time period is the ______

Shift factors for the supply curve include changes in price of productive resources. These include all of the following, except _____.

True or false. A market-clearing price only occurs in a market in equilibrium.

If a shortage exists in the market, the invisible hand will manipulate prices to maintain equilibrium by _____

Using the graph below, if supply shifts from S0 to S1, equilibrium price _____, and the equilibrium quantity sold _____.

Line S0 shifts to the right and down when moved to line S1.

True or false. The primary functions of price in a free market are to inform and direct consumers and firms.

Price ceilings can cause a shortage if they are set _____

A market clearing condition occurs when price floors are set _____.

True or false. Unintended market conditions, including black markets and shortages, can occur through the price restraint of a price ceiling set above the market-clearing price.

When comparing a good over a long time to the same good over a short period of time, the longer time period will demonstrate an elasticity of demand that is ______

If the price elasticity of demand for a product is zero regardless of pricing changes, the product is said to be ______.

True or false. Price elasticity of demand generally increases when a product's price is a smaller percentage of available spending power.

If income has changed by +40% and demand has changed by -30%, then the overall income elasticity of demand is ______.

A new compact car is released, and the income elasticity of demand is found to be equal to -0.2. In this case, the good is _____.

True or false. A product with low income elasticity will be affected less by falling wages than a product with high income elasticity.

Assume that peanut butter quantity demanded falls 8% and jelly prices fall 4%. In this case, the cross elasticity of demand between peanut butter and jelly is what?

Assume that jam and jelly have a cross elasticity of 0.8. This means that these goods are _____.

True or false. For two complementary products A and B, demand for complementary product B has an inverse relationship to price changes in complementary product A.

Price elasticity of supply is different from price elasticity of demand because _____

If mango prices rise by 10% and 8% more mangoes are supplied, the price elasticity of supply is about _____.

True or false. Price elasticity of supply will not change over time.

Jana's Jelly Jars cost $5.00 each, and Jana has standing orders for 2,000 jars per month. What is the total revenue generated each month?

Assume Jana has lost some market share due to competition ,and she's having trouble covering her costs. Also assume that donuts are a good with elastic demand in your market. Jana has asked you if she should raise or lower prices to increase total revenues. Jana should _____.

True or false. Raising prices on price-inelastic products will increase total revenues.