The total amount of a product available in a market at a given price is called the
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supply
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A factor that most directly affects the demand for automobiles is
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the individual tastes and preferences of buyers.
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According to the law of demand, price and quantity move
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along a track in opposite directions.
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According to the law of supply, price and quantity move
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along a track in the same direction.
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Which statement best explains the law of supply?
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The quantity supplied by producers increases as prices rise and decreases as prices fall.
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How do changing prices affect supply and demand?
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As price decreases, supply decreases, but demand increases.
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The point where supply and demand meet and prices are set is called
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equilibrium
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How do lower prices tend to affect demand?
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They tend to increase the interest in a product.
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Which statement best compares the laws of supply and demand?
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The two economic laws exist in theory. They work in practice, but real-world factors can have an effect.
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The chart compares the price of graphic T-shirts to the quantity demanded.
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This chart shows the link between
interest in a product and the price a consumer pays.
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Which explains the connection between the law of demand and excess demand?
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The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.
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The graph shows excess demand.
Which needs to happen in order to stop disequilibrium from occurring?
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The price of goods needs to be increased.
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Both excess supply and excess demand are a result of
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disequilibrium.
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The graph shows demand.
In order to achieve equilibrium, what else must be included on the graph?
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supply curve
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The graph shows excess demand.
Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?
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As prices fall, quantity demanded goes up.
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The graph shows a point of equilibrium.
If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?
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The price of the product will decrease to meet equilibrium.
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The graph shows a point of equilibrium.
How many goods must be supplied to achieve equilibrium?
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15
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A car dealer who does not have enough customers for a supply of new cars faces
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disequilibrium
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Which describes a way in which consumers most likely benefit from producers' absolute advantage?
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Prices decrease as a result of increased production efficiencies.
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Which best explains why producers choose to specialize? Check all that apply.
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to gain a comparative advantage
to increase efficiency
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What can a producer gain by specializing?
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absolute advantage
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Which company has the comparative advantage in producing large tubes of toothpaste?
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Mmmint
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Which scenario is the best example of an opportunity cost?
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A computer company produces fewer laptops to meet tablet demand.
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All else being equal, which bakery has the absolute advantage?
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Uncle John's
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A producer with an absolute advantage has the ability to produce a good or service at
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a lower cost than any competitor can.
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Which best describes how consumers may benefit from specialization?
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Consumers find products at lower prices.
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The term __________, often used in conjunction with absolute advantage, is defined as making the best use of resources.
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efficiency
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Which calculation helps determine which producer has the absolute advantage?
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Amount produced divided by resources used
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Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?
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technological monopoly
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____________ is the type of competition that occurs in a competitive market without identical producers.
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monopolisitic
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Why is competition limited in an oligopoly?
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High entry costs prevent new producers from entering the market.
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Why is the automobile industry considered an oligopoly?
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It has significant barriers to entry.
It depends on brand loyalty and image to generate sales.
It is dominated by a few key players.
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The market for which item generally involves pure competition?
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corn
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Who sets the price in a monopolistic competition?
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producers and consumers
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Which helps enable an oligopoly to form within a market?
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Costs of starting a competing business are too high.
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Which best describes how the government sanctions technological monopolies?
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by issuing a patent for the technology
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In the United States, which type of industry is often considered part of an oligopoly?
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cell phone carriers
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When an oligopoly exists, how many producers dominate the market?
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a few
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