Microeconomics Chapter 3

Your page rank:

Total word count: 405
Pages: 1

Calculate the Price

- -
275 words
Looking for Expert Opinion?
Let us have a look at your work and suggest how to improve it!
Get a Consultant

What does the law of demand state?

states that price and quantity demanded are inversely related.

Graphically, the market demand curve is:

the horizontal sum of individual demand curves.

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

direct, inverse

A demand curve indicates what?

indicates the quantity demanded at each price in a series of prices.

What do the income and substitution effects account for?

the downward sloping demand curve.

When an economist says that the demand for a product has increased, this means that:

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

By an increase in demand we mean that :

the quantity demanded at each price in a set of prices is greater.

The quantity demanded of a product increases as its price declines because the:

demand curve is downsloping.

The law of supply indicates that:

producers will offer more of a product at high prices than they will at low prices.

The upward slope of the supply curve reflects the:

law of supply.

A surplus of a product will arise when price is:

above equilibrium with the result that quantity supplied exceeds quantity demanded.

If we say that a price is too high to clear the market, we mean that:

quantity supplied exceeds quantity demanded.

Productive efficiency refers to:

the use of the least-cost method of production.

If an economy produces its most wanted goods but uses outdated production methods, it is:

not achieving productive efficiency.

Allocative efficiency is concerned with:

producing the combination of goods most desired by society.

Allocative efficiency involves determining:

the mix of output that will maximize society’s satisfaction.

The equilibrium price and quantity in a market usually produces allocative efficiency because:

marginal benefit and marginal cost are equal at that point.

Price floors and ceiling prices:

interfere with the rationing function of prices.

A price floor means that:

government is imposing a minimum legal price that is typically above the equilibrium price.

An effective ceiling price will:

result in a product shortage.

An effective price floor will:

result in a product surplus.

Price ceilings and price floors:

interfere with the rationing function of prices.

A price ceiling means that:

government is imposing a legal price that is typically below the equilibrium price.

If a legal ceiling price is set above the equilibrium price:

neither the equilibrium price nor equilibrium quantity will be affected.

Share This

More flashcards like this

NCLEX 10000 Integumentary Disorders

When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? a) ...

Read more


A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. I can’t do anything without ...

Read more

NASM Flashcards

Which of the following is the process of getting oxygen from the environment to the tissues of the body? Diffusion ...

Read more

Unfinished tasks keep piling up?

Let us complete them for you. Quickly and professionally.

Check Price

Successful message