question
If an increase in income causes an increase in the demand for a good, then the good is called a(n) _____ good.
answer
substitute
question
An institution that enables buyers and sellers to interact and transact with one another is called a:
answer
Substitute
question
According to the law of supply, if the price of cars decreases, what will happen to the quantity of cars supplied?
answer
The quantity supplied will decrease.
question
According to the following figure, a price of $20 would lead to:
answer
a shortage of 6.
At a price of $20 the quantity demanded is approximately 10 and the quantity supplied is approximately 4, leading to a shortage of 6.
At a price of $20 the quantity demanded is approximately 10 and the quantity supplied is approximately 4, leading to a shortage of 6.
question
The market economy is also called the __________ system.
answer
price. Because prices provide considerable information to both buyers and sellers.
question
A decrease in tax on the sale of a good would cause the supply curve for that good to shift:
answer
to the right.
question
Suppose that the supply of oil and the demand for oil both increase next year and that the increase in supply is less than the increase in demand. What will happen to the equilibrium price?
answer
It will rise.
question
All markets have the same basic component, which is:
answer
a transaction
question
The supply curve for potato chips in the potato chip market is:
answer
an upward-sloping line.
question
An institution that enables buyers and sellers to interact and transact with one another is called:
answer
a market
question
If a decrease in the price of one good causes a decrease in the demand for another, the two goods are called _____ goods.
answer
substitute
question
The price of gasoline has increased from $2.00 per gallon to $3.00 per gallon. How would this price change be represented on the demand curve?
answer
a movement from one point on the line to a higher point on the line
question
Because prices contain useful information for buyers and sellers, the market economy is sometimes called:
answer
the price system.
question
The supply curve for computers in the computer market is:
answer
an upward-sloping line.
question
Rhea just lost his job. Because of this decrease in his income he eats more bologna sandwiches. In this example, bologna sandwiches are what type of good?
answer
inferior good
question
The quantity demanded for bread has increased due to a decrease in price. How would this change in quantity demanded be represented on the demand curve?
answer
a movement from one point on the demand curve to a lower point on the demand curve
question
An increase in the price of corn can cause farmers to stop growing cotton in favor of corn. How would this be illustrated on a graph of the cotton market?
answer
a new supply curve to the left of the original curve
question
An expectation of future increases in the value of gasoline will cause the supply curve for gasoline in the current period to shift:
answer
to the left.
question
Advances in technology can make it less costly to produce a good or service. How would this be illustrated on a supply and demand graph?
answer
New supply curve to the right.
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