Ceiling |
A price _ is the maximum legal price a seller can charge for a good |
Related |
The price of _ goods is a determinant of demand |
Prices are too low for firms Prices are too high for consumers |
A government intervenes and prevents prices from rising above or falling below equilibrium levels when _ |
Decrease A leftward shift |
__ in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity. |
Independent |
The vast majority of goods that are not related to one another are called _ goods |
Inverse |
The law of demand describes a relationship between the price of a good or service and the quantity demanded of that good or service |
Marginal |
The added cost of producing one more unit of output is called _ cost |
Complementary |
A _ good is one that is used together with another good. |
Prices of related goods Changes in income Consumer tastes Number of buyers Consumer Expectations |
Which of the following are determinants of demand? |
Inverse relationship between price and quantity demanded for a product |
A demand curve shows the plotted: |
… |
If costs of production rise, the producer has an incentive to produce _ output. |
Taxes and subsidies Producer expectations Prices of other goods |
Which of the following are determinants of supply? |
Rises; falls |
The law of supply states that as price _, the quantity supplied (Q5) rises; as price _, the quantity supplied falls. |
Floor |
A price _ is a minimum price fixed by the government, generally imposed above the price, which is otherwise known as the equilibrium price. |
A market is a virtual and/or physical institution or space. A market can be local, national, or international. |
From an economic perspective, which of the following are true of a market? |
A perfect competition, an economy’s most highly competitive market. |
Which of the following consists of a large number of independently acting buyers or sellers? |
Demanded |
A shortage results from an excess of quantity _ |
Raise |
In general, a firm will _ the output of a good or service if the price of the good is higher |
Diminishing |
Consumers experience _ marginal utility the more they consumer of a particular good or service. |
Technology Taxes and subsidies Resource prices |
Which of the following are the determinants of supply? |
Supply |
A surplus is also known as an excess of _ |
Income |
For most, but not all products, a rise in _ causes an increase in demand. |
Lower; more |
The income effect indicates that a _ price increases the purchasing power of income, enabling consumers to purchase _ of a product and vice versa. |
Decrease; increase |
An increasing in business taxes causes a _ in supply and will _ production costs. |
… |
The number of buyers is a determinant of market _. |
An increase in the number of shoe stores at the local mall An increase or decrease in wages An increase in the excise tax on cigarettes |
Which of the following would result in a change in supply? |
Price of substitues in production |
All of the following are the determinants of demand, except: |
Determinants; price |
The _ of supply of a good are any factors other than the product’s _ that cause the supply curve of the good to shift. |
Supply |
An increase in _ while holding demand constant results in a decrease in equilibrium price, but an increase in equilibrium quantity. |
Decline |
A decrease in demand while holding supply constant results in _ in both equilibrium price and quantity. |
The buyer side of any market |
Which of the following specifically refers to demand? |
Supply |
Producer expectations of future pricers are a determinant of _ |
Production |
The production of a good or service in the least costly way is known as a _ efficiency. |
Supply |
The prices of substitute goods that are used in production is a determinant of _ |
Pepsi and Coca-Cola |
Which of the following are substitutes? |
Inferior |
Products that have decreased demand when consumer incomes ride and increased demand when consumer incomes fall are called _ goods |
Quantity |
The interaction between buyers and sellers determines equilibrium price and equilibrium _ |
When the price of lettuce increases, the demand for salad dressing decreases When the price of tuition decreases, the demand for textbooks increases |
Which of the following illustrates the relationship between a good and its complement? |
Supply |
The number of sellers or competitors in a market is a determinant or shifter of the _ curve |
Resources |
The price of _ used in the production process help determine the costs of production incurred by firms. |
Consumer |
One of the determinants of demand is _ expectations |
Price and quantity suplied |
The supply curve illustrates the relationship between: |
Subsidy |
When the government provides financial assistance for the production of a good which lowers producers’ costs and increases supply, it is called a |
Inverse relationship |
When two variables are being examined, and one variable moves one way and the other variable moves in the opposite direction, this is called a |
Clearing |
Equilibrium price is otherwise known as market- price. |
Distortions in resource allocation Negative side effects Shortages Surpluses |
Government-set prices cause: |
Increased subsidies to farmers for producing more corn |
Which of the following does not exemplify an improvement in technology affecting supply? |
Supply |
Market _ is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period |
Allocative efficiency |
Which of the following refers to a particular apportionment or mix of goods and services most highly valued by society? |
Increase |
An increase in demand while holding supply constant results in a _ in both equilibrium price and quantity. |
Shift of; movement along |
A _ the demand curve represents a change in demand while a _ the demand curve represents a change in the quantity demanded. |
left/right |
When a factor other than price affects consumption of a good or service, the demand curve can shift _ or _. |
decrease; left |
An unfavorable change in consumer tastes and preferences for a product will _ demand, illustrated as a shift of the demand curve to the _. |
Supplied; price |
The supply curve measures quantity _ on the horizontal axis and _ on the vertical axis. |
Price decreases = quantity demanded increases Price increases = quantity demanded decreases |
Which of the following statements describe the law of demand? |
higher; reduce |
_ resource prices raise production costs and, assuming a fixed product price, _ profits. |
A leftward shift and decrease |
_ in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity. |
… |
A buyer’s intentions or plans in regard to the purchase of a product is known as: |
Horizontal (x) Vertical (y) |
Quantity demanded is illustrated on the _ axis, while price is illustrated on the _ axis. |
Marginal-cost curve |
The supply curve for any good, private or public is: |
Rival |
A private good that displays _ characteristics means that when someones buys and consumes that good, it is not available for someone to buy or consume |
Rivalry; excludability |
Characteristics of a pure private good include: |
Only the direct, private benefits to those who demanded and use the product |
The market demand curve for positive externalities reflects: |
Nonexcludability |
When there is no effective way of keeping individuals from the benefit of a good once it comes into existence, the characteristic of the good becomes distinguished by |
Spillover cost; negative externality |
If a third party to a market transaction is experiencing an uncompensated cost, then the transaction results in a market failure known as a _____________ or _____________. |
demand-side supply-side |
Market failures in competitive markets can be classified into _side and _side |
Subsidies to buyers Government provision of public goods Subsidies to producers |
Which of the following are the three options available to government to correct spillover benefits or the under allocation of resources? |
Spillover benefit |
A positive externality is an uncompensated |
Maximum |
Consumer surplus is the difference between the _ price a consumer is willing to pay for a product and the price is paid |
A cost-benefit analysis |
A comparison of marginal changes is known as: |
Externality |
A _ is a cost or a benefit accruing to an individual or group, a third party, that is external to a market transaction |
Externality |
A _ causes some of the benefits or costs of a market transaction to be passed on to a third party |
Public good |
If a good is nonrival and nonexcludable, then it is known as a: |
Excludable |
A private good is _ when a seller can prevent people who did not pay for a product from obtaining its benefits. |
Producer surplus |
The difference between the actual price a seller receives and the minimum acceptable price |
Non-rivalry |
_ in consumption means that one person’s consumption of a of a good does not preclude consumption of the good by others |
Government |
Cost-benefit analysis can help the _ decide on the extent to which a public project should be pursued. |
Quasi-public goods |
Fire protection, police protection, libraries, and sewage disposal are all examples of |
Market based |
Cap-and -trade is what kind of program |
ECON Exam 2
Share This
Unfinished tasks keep piling up?
Let us complete them for you. Quickly and professionally.
Check Price