Econ Chapter 3

The requirement that when analyzing the relationship between two variables - such as price and quantity demanded - other variables must be held constant.

A market equilibrium with many buyers and sellers.

Goods and services that are used together.

A curve that shows the relationship between the price of a product and the quantity of the product demanded.

A table showing the relationship between the price of a product and the quantity of the product demanded.

The characteristics of a population with respect to age, race, and gender.

The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power.

A good for which the demand increases as income falls and decreases as income rises.

The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product will decrease.

The rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.

The demand by all the consumers of a given good or service.

A situation in which quantity demanded equals quantity supplied.

A good for which the demand increases as income rises and demand decreases as income falls.

A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

The amount of a good or service that a consumer is willing and able to purchase at a given price.

The amount of a good or service that a firm is willing and able to supply at a given price.

A situation in which the quantity demanded is greater than the quantity supplied.

Goods and services that can be used for the same purpose.

The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to goods that are substitutes.

A curve that shows the relationship between the price of a product and the quantity of the product supplied.

A table that shows the relationship between the price of a product and the quantity of the product supplied.

A situation in which the quantity supplied is greater than the quantity demanded.

A positive or negative change in the ability of a firm to produce a given level of output with a given amount of inputs.

What does the term quantity demanded refer to? a. The total amount of a good that a consumer is willing to buy per month. b. The quantity of a good or service demanded that corresponds to the quantity supplied. c. The quantity of a good or service that a consumer is willing and able to purchase at a given price. d. None of the above.

Which of the following is the correct definition of demand schedule? a. The quantity of a good or service that a consumer is willing to purchase at a given price. b. A table showing the relationship between the price of a product and the quantity of the product demanded. c. A curve that shows the relationship between the price of a product and the quantity of the product demanded. d. The demand for a product by all the consumers in a given geographical area.

Which of the following is the correct definition of demand curve? a. The quantity of a good or service that a consumer is willing to purchase at a given price. b. A table showing the relationship between the price of a product and the quantity of the product demanded. c. A curve that shows the relationship between the price of a product and the quantity of the product demanded. d. The demand for a product by all the consumers in a given geographical area.

Which of the following is the correct definition of market demand? a. The quantity of a good or service that a consumer is willing to purchase at a given price. b. A table showing the relationship between the price of a product and the quantity of the product demanded. c. A curve that shows the relationship between the price of a product and the quantity of the product demanded. d. The demand by all the consumers for a given good or service.

When the price of a digital music players rises, the quantity of digital music players demanded by consumers falls. According to this statement, what do we call the demand curve for digital music players? a. Unpredictable b. Upward sloping c. Downward sloping d. An exception to the law of demand

Which of the following explains why there is an inverse relationship between the price of a product and the quantity of the product demanded? a. The substitution effect b. The income effect c. The law of demand d. The price effect

What is the law of demand? a. The law of demand states that a change in the quantity demanded, caused by changes in price, makes the good more or less expensive relative to other goods. b. The law of demand states that a change in the quantity demanded, caused by changes in price, affects a consumer's purchasing power. c. The law of demand states that, holding everything else constant, when the price of good falls, the quantity demanded will increase, and vice versa. d. The law of demand is the requirement that when analyzing the relationship between price and quantity demanded, other variables must be held constant.

Which of the following best describes how changes in price affect a consumer's purchasing power? a. The law of demand b. The substitution effect c. The income effect d. The term ceteris paribus

Which of the following best describes how consumers consider buying other goods when the price of a good rises? a. The law of demand b. The substitution effect c. The income effect d. The term ceteris paribus

When analyzing the relationship between the price of a good and quantity demanded, other variables must be held constant. Which term best describes such an assumption? a. The law of demand b. The substitution effect c. The income effect d. Ceteris paribus

When two goods are complements, which of the following occurs? a. The two goods can be used for the same purpose. b. The two goods are used together. c. The demand for each of these goods increases when income rises. d. The demand for each of these goods increases as income falls.

When two goods are substitutes, which of the following occurs? a. The two goods can be used for the same purpose. b. The two goods are used together. c. The demand for each of these goods increases when income rises. d. The demand for each of these goods increases as income falls.

What is an inferior good? a. A good for which demand increases as income rises. b. A good for which demand decreases as income rises. c. A good that cannot be used together with another good. d. A good that does not serve any real purpose.

What is a normal good? a. A good for which demand increases as income rises. b. A good for which demand decreases as income rises. c. A good that can be used together with another good. d. A good that does serves more than one purpose.

Which of the following would NOT shift the demand curve for a good or service? a. A change in the price of a related good b. A change in the price of the good or service c. A change in expectations about the price of the good or service d. A change in income

What does the term quantity supplied refer to? a. The quantity of a good or service that a firm is willing and able to supply at a given price. b. A table that shows the relationship between the price of a product and the quantity of the product supplied. c. A curve that shows the relationship between the price of a product and the quantity of the product demanded. d. None of the above

Which of the following is the textbook's definition of supply schedule? a. The quantity of a good or service that a firm is willing to supply at a given price. b. A table that shows the relationship between the price of a product and the quantity of the product supplied. c. A curve that shows the relationship between the price of a product and the quantity of the product demanded. d. None of the above

Which of the following is the textbook's definition of supply curve? a. The quantity of a good or service that a firm is willing to supply at a given price. b. A table that shows the relationship between the price of a product and the quantity of the product supplied. c. A curve that shows the relationship between the price of a product and the quantity of the product supplied. d. None of the above

Which of the following is consistent with the law of supply? a. An increase in price causes an increase in the quantity supplied, and a decrease in price causes decrease in the quantity supplied. b. A change in price causes a shift of the supply curve. c. Supply shifts are caused not by a single variable but most likely by a number of different variables. d. All of the above

A surplus exists in a market if the actual price is a. equal to equilibrium price. b. below equilibrium price. c. above equilibrium price. d. either above or below the equilibrium price.

If a shortage exists in a market we know that the actual price is a. below equilibrium price and quantity demanded is greater than quantity supplied. b. above equilibrium price and quantity demanded is greater than quantity supplied. c. above equilibrium price and quantity supplied is greater than quantity demanded. d. below equilibrium price and quantity supplied is greater than quantity demanded.

An early frost in the apple orchards of Washington State would cause a. an increase in the demand for apple juice, increasing price. b. an increase in the supply of apple juice, decreasing price. c. a decrease in the demand for apple juice, decreasing price. d. a decrease in the supply of apple juice, increasing price.

Which of the following would definitely result in a higher price in the market for tennis shoes? a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase

Suppose that the income of buyers in a market increases and a technological advancement also occurs. What would we expect to happen in the market for a normal good? a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. c. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. d. Both equilibrium price and equilibrium quantity would increase.