demand and supply

market

an institution that brings together buyers and sellers

markets explained on the basis of supply and demand

assume many buyers and many sellers of a standardized project

the law of demand states

price and quantity demanded are inversely related

graphically the market demand curve is

the horizantal sum of individual demand curves

the demand curve shows the relationship between

price and quantity demanded

economists use the term demand to refer to

a schedule of various combinations of market prices and amounts demanded

the relationship between quantity supplies and price is - and the relationship between quantity demanded and price is -

direct, inverse w

when the price of a product increases, a consumer is able to buy less of it with a given money income. This describes

the income effect

a demand curve

indicated the quanitty demanded at each price in a series of prices

in presenting the idea of a demand curve economists presume that the most improtant variable in determining the quanityt demanded is

the price of the product itself

an increase in the price of a product will reduce the amount of it purchases because

consumers will substitute other products for the one whose price has risen

the income and substitution effects account for

the downward sloping demand curve

when the price of a product rises, consumers shift theri purchases to other products whose prices are now relatively lower, this statmement desribes

the substitution effect

when the price of a product falls, the purchasing power of our money income rises and thus permits consumers too purchase more of the product. This statement describes

the income effect

the equation ofr the demand curve in the above diagram is

C. P= 35-.5Qw

when product prices change, consumers are inclined to purchase larger amoutns of the now cheaper products and less of the now more expensive products. This describes

the substitution effect

the construction of femand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is

incomes

one reason that the quantity of a good demanded increases when its price falls is that the

lower price increases the real incomes of buyers, enabling them to buy more

a recent study found that an increase in the federal tax on beer would reduce the demand for marijuana. we can conclude that

beer and marijuana are complimentary goods

in the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by

a change in bueyrs tasts

which of the following will not cause the demand for product k to change

a change in the price of K

which of the following would nto shift the demand curve for beef?

a reduction in the price of cattle feed

in 2003 the price fo oil increases, which in turn causes the price of natural gas to rise. This can best be explained by saying that oil and natural gas are

substitute goods and the higher price for oil increased the demand for natural gas

an economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This predicitons is based on the assumption that

bicycles are normal goods

a rightward shift in the demand curve for product c might be caused by

a decreased in the price of a product that is complimentary to c

if 2 goods are complements

a decrease in the price of one will increase the demand for the other

dvd payers and dvds are

complementary goods

if the demand curve for product b shifts to ther right as the price of product a declines, ther

A and B are complimentary goods

if the price of produc L increases, the demand curve for close - substitute product J will:

shift to ther right

if the price of K declines, thhe demand curve for the complimentary poduct of J will

shift to ther right

which of the following is most likely to be an inferior good?

used clothing

which of the following statements is correct

an increase in the price of c will decrease the demand for complimentary product D

a shift to the right in the demand curve for product A can be most reasonably explained by syaing that

consumer preferences have changed in favor of A so that they now want ot buy more at each possible price

If L and M are complimetnary goods, an increase in the price of L will result in

a decrease in the sale of M

Which of the following will cause the demand curve for product a to shift ot the left

an increase in money income if A is an inferior good

If x is normal good, a rise in mone income iwll shift the

demand curve for x to the right

if Z is an inferior good, a decrease in money income will shift the

demand cure for Z to the right

if 1994 ford sold …. 7500 per car . these statements suggest

the demand for escorsts increases between 1994 and 1995

other things qual, which of the following might shift the demand curve for gasoline to the left

the devleopment of low cost electric automobile

an increase in consumers incomes will

increase the demand for a normal good

tennis rackets and ballpoint pens

are independant goods

the demand fo most products varies directly with changes inc onsumer incomes. Such products are known as

normal goods

assume the demand curve for product x shifts to the right. This might be caused by

a decline in income if Xis an inferiori good

cameras and film are

complementary goods

a decrease in the price of camerasn will

shift the demand curver for film to the right

a normal good is one

the consumption of which varies directly with incomes

if the demand for a normal good (steak) shifts to the left, the most likely reason is thant

consumer incomes have fallen

in consumer incomes increase, the demand for product x is

may shfit either to the right or left

if products a and b are compliments and the price of b decreases th

demand for a will increase an amoutn of B demand will increase

if products c and d are close susbtitutes, an increase in the price of c will

shift the demand curve of D to the right

in consturcting a stable demand curve for product x

the prices of other goods are assumed constant

the demand curve for a prroduct might shift as a result of change in

all of the above

an inferior good is

not accurately defined by any of the above statements

suppose an execise tax is impsoed on product x, we could expect this tax to

decrease the demand for complimentary good y and increase the demand for subsitute product z (b)

an increase in the price of product a will,

increase the demadn for substitue product b

a decrease in demand is depicted by a

shift from d1 to d2

a decrease in quanitty demanded (as distinct from a decrease in demand) is depicted by a

move from point y to point x

when an economist says that the demand for a product has increase, this means that

consumers are now willing to purchase more of this product at each possible price

in the corn martker, the price of corn rises and falls in respons to the change in supply and demand - in which of these statements are the tersm demand and supply being used correctly

in the second statement

by and increase in demand we mean that

the quanity demeand at each price in a set of prices is greater

the quantity demanded as a product inceases as its price declines beacut the

demand curve is downslopins

the term quantity demanded

refers tothe amount of product that will be purchased at some specific price

if consumers are willing to pay a higher price than previously for eahc levle of output,we can say tha the folowing has occured

an increase in demand

a decrease in demand for recreational fishing boats might be caused by an increase in the

price of outward motors

an increase in demand means that

the demand curve has shifted to the right

assume that the demand schedule for product c is downslopin, if the price of c falls from 2 $ to 1.75

a larger quanitty of c will be demanded

an increase in the quanitty demanded means that

price has decliend and consumers therefore want to purchase more of this product

an increae in product will cause

quantity demanded to increase

IN MOVING ALONG A STABLE DEMAND CURVE WHICH OF THE FOLLOWING IS NOT HELD CONSTANT

the price fo the product for which the demadn curve is relevant

a decrease in supply is depicted by a

shift from s2 to s1

an increase in quantity supplies is depiced by a

move from point y to x

the law of supply indicates that

poducers will offer more of a product at high prices than they will at lower prices.

the upward slope of the supply curve reflects the

law of supply

the equation for the supply curve in the above diagrma is

5+1/3Q

the supply curve shows the relationship between

price and quanittysupplies

a firms supply curve is upsloing because

beyond some point the production consts of additional unit sof output will rise

a leftward shift of a product supple curve must be caused by

some firms leaving an industry

the locations of the product supply curve depends on

production technology

an improvement in productiont echnology will

shift the suply curve to the right

bcs of unseasonably cold wather, he supply of oranges has substanitaly decreases. this stament indicates that

the amt of oranges that will be available at various prices has declined

the law of supply

reflects the amoutns that producers will want to offer at eaach price in a series of prices

if producers mus tobtain highe prices than previosuly to produce various levels of output, the following has occurres

a decrease in supple

in moving along a stbale supply curve which of the following is not held constant

the price fo the product for which the curve is relevant

the location of the supply curve fo a product depends n

all of the above