Quiz 3 M-E – Flashcards
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Which of the following statements is correct?
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An increase in the price of C will decrease the demand for complementary product D.
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Which of the following will cause the demand curve for product A to shift to the left?
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An increase in money income if A is an inferior good.
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Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to:
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reduce the demand for soda and increase the demand for tacos.
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When an economist says that the demand for a product has increased, this means that
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consumers are now willing to purchase more of this product at each possible price.
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The upward slope of the supply curve reflects the:
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law of supply.
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Increasing marginal cost of production explains:
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why the supply curve is upsloping
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Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will:
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increase, quantity demanded will decrease, and quantity supplied will increase.
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There will be a surplus of a product when:
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consumers want to buy less than producers offer for sale.
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Other things equal, an excise tax on a product will:
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increase its price.
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In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
Refer to the given information. An increase in income, if X is a normal good, will:
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increase D, increase P, and increase Q.
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In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
Refer to the given information. An increase in the prices of resources used to produce X will:
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decrease S, increase P, and decrease Q.
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In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
Refer to the given information. A reduction in the number of firms producing X will:
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decrease S, increase P, and decrease Q.
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Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement:
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suggests that the supply of Blu-ray players has increased.
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An effective price floor on wheat will:
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result in a surplus of wheat.
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A market for human organs (rather than the current volunteer-donor system) would be expected to:
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eliminate the shortage of organs
