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48 Cards in this Set
- Front
- Back
Demand is the rate of desired and attainable purchase at each possible price, other things constant. |
True |
|
A demand schedule indicates what an individual desires. |
False |
|
Prices of all other goods are held constant for a given demand schedule. |
True |
|
An increase in the price of one good, other things constant, encourages consumers to switch to other goods.
|
True |
|
A price increase results in a decrease in a consumer's real income. |
True |
|
The demand curve for normal goods slopes down, but the demand curve for an inferior good slopes up. |
False |
|
Movements along a demand curve represent changes in quantity demanded. |
True |
|
A change in income causes a change in quantity demanded. |
False |
|
Generally, economists assume that tastes change frequently and are the causes of changes in demand. |
False
|
|
An increase in the price of a good provides an incentive to suppliers to switch resources from other goods and use them in producing more of the good with the higher price. |
True |
|
The market supply curve represents the sum of individual supply curves. |
True |
|
An increase in the price of a required resource shifts the supply curve of the good produced with it to the right. |
False
|
|
Technological change causes an increase in quantity supplied. |
False |
|
Market reduce the transaction costs of exchange. |
True |
|
If the price is above the equilibrium price, there is an excess quantity supplied. |
|
|
An increase in demand lowers the equilibrium price. |
False |
|
An increase in the price of a required resource will cause a change in supply of the good produced with it. |
True |
|
Disequilibrium can never exist if the markets are allowed to operate without government intervention. |
False |
|
A price ceiling often lead to an excess quantity demanded. |
True |
|
Demand reflects the quantity the consumers |
are willing and able to buy at alternative prices |
|
Which of the following is not held constant in defining the demand schedule? |
price of the good in question
|
|
The substitution effect of a change in the price of good X is to |
encourage consumers to substitute more of good X for other goods if X's price falls
|
|
A price change |
affects the consumer's ability to buy the good and the consumer's willingness to buy the good |
|
The income effect of a price change will be greatest for which of the following goods? |
House |
|
A movement along a demand curve can be caused by a change in |
the price of the good in question |
|
A change in quantity demanded is caused by a change in |
price |
|
Which of the following will cause an increase in the demand for an inferior good? |
an increase in the number of consumers |
|
Supply indicates the quantity that producers |
are willing to offer for sale at a given price |
|
Price and quantity supplied are usually directly related because |
higher prices mean that producers are rewarded more for production and the law of increasing opportunity cost applies |
|
Which of the following does not change supply? |
a change in price of the good in question |
|
A movement along a supply curve is caused by |
a change in the number of consumers |
|
If the price of an alternative good falls, but the price of good X remains the same, |
supply of good X will increase |
|
The larger the market, |
the greater the degree of specialization |
|
An excess quantity demanded tends to |
put upward pressure on price |
|
A shift in the supply curve with demand held constant will |
cause equilibrium quantity to change in the same direction and the equilibrium price to change in the opposite direction |
|
Price ceilings tend to produce |
shortage |
|
A shortage exists when, for a given price, quantity demanded exceeds |
quantity supplied |
|
Government-imposed price floors tend to produce a |
surplus |
|
If the quantity demanded equals quantity supplied at a specific price, the market is in |
equilibrium |
|
A change in technology causes a change in |
supply |
|
alternative goods |
are goods that are produced using the same resources |
|
an increase in price causes a(n) |
increase in quantity supplied |
|
supply is a relationship between price and |
quantity supplied during a given time period, other things constant |
|
Bread is a |
normal good if demand for it increases when income increases |
|
Two goods are |
substitutes if an increase in the price of one causes the demand for the other to increase |
|
demand schedule |
a change in the price of the good leads to a change in quantity demanded; a change in a relevant factor other than the price of the good leads to a change in demand |
|
demand is a relation indicating the quantity of a commodity that consumers are _________ and ___________ to purchase at various prices during a given time period, others things constant |
willing; able |
|
a price increase has two effects, the ________ effect means that a consumer switches to a relatively less expensive good; the __________ effect means that the consumer's purchasing power changes |
substitution; income |