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A market: |
An institution that brings together buyers and sellers |
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The law of demand states that, other things equal |
Price and quantity demanded are inversely related |
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The demand curve shows the relationship between |
Price and quantity demanded |
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The relationship between quantity supplied and price is ____ and the relationship between quantity demanded and price is ____. |
Direct, inverse |
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When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes |
Income effect |
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An economist for a bicycle company predicts that other things equal, a rise in consumer income will increase the demand for bicycles. This prediction assumes that: |
Bicycles are normal goods |
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DVD players and DVDs are: |
Complementary goods |
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Which of the following is most likely to be an inferior good? |
Used clothing |
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Other things equal which of the following might shift the demand curve for gasoline to the left? |
Development of a low-cost electric automobile |
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Digital cameras and memory cards are: |
Complementary goods |
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Suppose tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to |
Reduce the demand for soda and increase the demand for tacos |
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Refer to the above diagram. A decrease in demand is depicted by a: |
Shift from D2 to D1 |
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Refer to the above diagram. A decrease in quantity demanded is depicted by a: |
Shift from point y to point x |
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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 |
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The law of supply indicates that other things equal |
Producers will offer more of a product at high prices than at low prices |
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A leftward shift of a product supply curve might be caused by |
Some firms leaving an industry |
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Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops we should expect |
The supply to increase as farmers plant more |
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A market is in equilibrium |
If the amount producers want to sell is equal to the amount consumers want to buy |
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Refer to the above diagram, which show demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will be |
0F and 0C respectively |
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Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. Given D0, if the supply curve moved from S0 to S1 then |
Supply has decreased and equilibrium quantity has decreased |
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