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Microeconomics-4
Exam 1
| Question | Answer |
|---|---|
| how much likely sold | market potential |
| quantity demanded depends on: | price, population size, consumer incomes, tastes, prices of other products |
| if price increases, quantity demanded (increases or decreases) | decreases |
| displays how much consumers in particular area are willing and able to buy at different prices during a specified period of time | demand schedule |
| as price increases, consumers _____ of market and _____ | drop out; switch to different/similar product |
| as price increases, consumption _____ | decreases |
| demand curves have _____ slope | negative |
| demand curves display relationship between: | price and quantity demanded |
| shifts in demand curve do not occur due to changes in _____ | price |
| changes in any influences on demand other than price: | shift entire demand curve |
| if there is a change in price... | movement along demand curve |
| if consumer income increases, demand (increases or decreases); curve shifted which direction? | increases; right |
| if population increases, consumption of (more or less) of the good; curve shifted which direction? | more; right |
| if successful ad campaign, consumption of (more or less) of the good; curve shifted which direction? | more; right |
| if consumer preference in favor of good, curve shifted _____ | right; outward |
| if alternative goods become cheaper, demand (increases or decreases); curve shifted which direction? | decreases; left |
| if price of a complement decreases, demand for good (increases or decreases); curve shifted which direction? | increases; right |
| increase price of goods that are substitute for good in question, (increases or decreases) demand; curve shifted which direction? | increases; right |
| increase price of good normally used with good in question, (increases or decreases) demand; curve shifted which direction? | decreases; left |
| quantity demanded only based on _____ | price |
| entire curve represents _____, not _____ | demand; quantity demanded |
| A demand curve shows the relationship between the ______ of a good and its ______________. | price; quantity demanded |
| If nothing else changes, an increase in the price of a good leads to a _______ in the quantity demanded of that good. | decrease |
| Movement along a demand curve is caused by changes in the _______. Demand curves ______ when something else that affects how much people want to buy changes. | price; shift |
| What is something that causes the demand curve to shift when it changes? | population size, consumer income, tastes/preferences, price of substitutes |
| The figure shows the market for orange juice. If the market starts at point A, an increase in the price of soda will most likely lead to point ___. | D |
| quantity supplied (is or isn't) fixed | isn't |
| increase in price leads to an (increase or decrease) in quantity supplied | increase |
| as increase resources devoted to production of a good, the OC of obtaining another unit (increases or decreases) | increases |
| more profitable to increase production of a good only if sell product at (higher or lower) price? | higher |
| relationship between price and quantity supplied | supply schedule |
| supply schedules show how much sellers are willing to _____ during a specified period of time | provide |
| supply curves slope | upward |
| determinants of supply schedule (shifts) | size of industry, technological inputs, prices of inputs, prices of related outputs |
| if more people enter industry, the quantity supplied (increases or decreases); shifting curve which direction? | increases; right |
| if more producing locations, the quantity supplied (increases or decreases); shifting curve which direction? | increases; right |
| if decrease industry, quantity supplied (increases or decreases); shifting curve which direction? | decreases; left |
| technological processes that reduce costs shift curve which direction? | right |
| reducing production costs shifts curve which direction? | right |
| increase in price of inputs that suppliers must buy will shift SC which direction? | left |
| A supply curve shows the relationship between the ______ of a good and its _______ _______. | price; quantity supplied |
| If nothing else changes, a decrease in the price of a good leads to a _______ in the quantity supplied of that good. | decrease |
| ______ ______ a supply curve is caused by changes in the price. Supply curves shift when something else that affects how much people want to _______ changes. | movement along; sell |
| What is something that causes the supply curve to shift when it changes? | technological progress, input prices, output prices, number sellers |
| The figure shows the market for backpacks. If the market starts at point A, an increase in the price of backpacks will most likely lead to point __. | E |
| quantity demanded exceeds quantity supplied | shortage |
| shortage drives price (up or down) | up |
| quantity supplied exceeds quantity demanded | surplus |
| surplus drives price (up or down) | down |
| "market clearing" price | equilibrium price |
| when quantity demanded equals quantity supplied | equilibrium price |
| if price lower than equilibrium price: | shortage |
| what happens when there is a shortage? | some customers are unable to purchase desired quantities and offer to pay more |
| when there is a shortage, market price (increases or decreases); why? | increases; consumer competition |
| if price exceeds equilibrium | surplus |
| what happens when there is a surplus? | producers unable to sell desired quantities and undercut competitors by reducing price (price cutting) |
| are markets always in equilibrium? | no |
| _____ is disrupted by changes in supply and demand | equilibrium |
| in free market, forces of supply and demand push price toward | equilibrium level |
| shifts in supply and demand curves _____ equilibrium | disrupt |
| rightward shift of demand curve: | increases equilibrium price and quantity |
| leftward shift of demand curve: | decreases equilibrium price and quantity |
| rightward shift of supply curve: | decreases equilibrium price and increases equilibrium quantity |
| leftward shift of supply curve: | increases equilibrium price and decreases equilibrium quantity |
| When a market is in equilibrium, the price is at the level where _______ and _______ are equal. | quantity supplied; quantity demanded |
| In the figure, the equilibrium price of sunglasses is _______ dollars per pair and the equilibrium quantity is _______ pairs of sunglasses. | 60; 450 |
| In the same figure, at a price of $90/pair there will be a _______ of ______ pairs of sunglasses. | surplus; 450 |
| If there is a shortage in the market for flashdrives, the price of flashdrives will _____, the quantity demanded will ______ and the quantity supplied will ______. | increase; decrease; increase |
| The graphs in the figure show the supply and demand curves for the market for bicycle helmets. Which panel best describes what happens in this market if the price of bicycles rises substantially? | panel D |
Created by:
mel_pro4