question
A market is in equilibrium:
answer
if the amount producers want to sell is equal to the amount consumers want to buy
question
The rationing function of prices refers to the:
answer
capacity of a competitive market to equate the quantity demanded and the quantity supplied
question
Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?
answer
an increase in supply
question
A market:
answer
is an institution that brings together buyers and sellers
question
The law of demand states that:
answer
price and quantity demanded are inversely related
question
Graphically, the market demand curve is:
answer
the horizontal sum of individual demand curves
question
The demand curve shows the relationship between:
answer
price and quantity demanded
question
The relationship between quantity supplied and price is __________ and the relationship between quantity demanded and price is ________.
answer
direct, inverse
question
In presenting the idea of a demand curve economists presume that the most important variable in determining the quantity demanded is:
answer
the price of the product itself
question
The constuction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:
answer
price
question
In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by:
answer
a change in buyer tastes
question
Which of the following will not cause the demand for product K to change?
answer
a change in the price of k
question
A rightward shift in the demand curve for product c might be caused by:
answer
a decrease in the price of a product that is complemetary to c
question
If two goods are complements:
answer
a decrease in the price of one will increase the demand for the other
question
DVD players and DVDs are:
answer
complementary goods
question
If the price of product I increases, the demand curve for close-substitute product j will:
answer
shift to the right
question
If z is an inferior good, an increase in money income will shift the:
answer
demand curve for z to the left
question
The demand curve for a product might shift as the result of a change in:
a. consumer tastes
b. consumer incomes
c. the prices of related goods
d. all of these
a. consumer tastes
b. consumer incomes
c. the prices of related goods
d. all of these
answer
d.
question
The law of supply indicates that:
answer
producers will offer more of a product at high prices than they will at low prices
question
The supply curve shows the relationship between:
answer
price and quantity supplied
question
A leftward shift of a product supply curve might be caused by:
answer
some firms leaving an industry
question
In a moving along a stable supply curve which of the following is not held constant?
answer
the price of the product for which the supply curve is relevant
question
Other things equal, if the price of a key resources product x falls, the:
answer
product supply curve of x will shift to the right
question
An increase in the exercise tax on cigarettes raises the price of cigarettes by shifting the:
answer
supply surve for cigarettes leftward
question
A government subsidy to the producers of a product:
answer
increases product supply
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