Macro Economy Chapter 3 – Flashcards
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A buyer is said to have a demand for a good only when
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The buyer is both willing and able to purchase the good at alternative prices.
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A rightward shift in a demand curve and a leftward shift in a supply curve both result in a
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Higher equilibrium price.
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To calculate market supply, we
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Add the quantities supplied for each individual supply schedule horizontally.
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The goal of the consumer in a market economy is to use his or her limited income to buy
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The greatest number of goods and services possible.
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The law of supply implies that
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Supply curves are upward-sloping to the right.
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The equilibrium price in a market is found where
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The market supply curve intersects the market demand curve.
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In a market economy, the people who receive the goods and services produced are those who
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Are willing and able to pay the market price.
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A market is said to be in equilibrium when
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The quantity demanded equals the quantity supplied.
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In a market economy, which of the following determines the answer to the WHAT to produce question?
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Prices and profit.
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To calculate market demand, we
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Add the quantities demanded for each individual demand schedule horizontally.
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Which of the following is a determinant of supply?
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The prices of the factors of production.
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A market shortage is
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The amount by which the quantity demanded exceeds the quantity supplied at a given price.
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A shift in supply is defined as a change in
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Supply because of a change in a nonprice determinant.
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If there is a surplus at a given price, then
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That price is greater than the equilibrium price.
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A market in which final goods and services are exchanged is a
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Product market.
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The goal of the business firms in a market economy is to maximize
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Total profits.
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If there is a shortage at a given price, then
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That price is less than the equilibrium price.
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Individual consumers supply ____ and purchase ____.
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factors of production; final goods and services
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At the equilibrium price, there are
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No shortages or surpluses.
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Complete Table 3.1. Then answer the indicated question. Picture Picture
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? 30.
