# Econ Chapter 3 Week 4 Flashcard

Which of the following would not cause the market supply of cell phones to change?
A reduction in the demand for cell phones causes the price to fall
Which of the following is a determinant of supply?
prices of the factors of production
Ceteris paribus, according to the law of supply, if the price of product Z increases from \$6 to \$8, then the
Quantity supplied of Z will increase
A movement along the supply curve is the same as:
change in the quantity supplied
Ceteris paribus, which of the following will cause the supply of paper to decrease?
The price of lumber, an ingredient in paper production, increases
Which of the following will cause a leftward shift of the supply curve for houses
An increase in the cost of construction materials
Which of the following will cause a leftward shift of the supply curve for electricity?
an increase in the taxes on electricity production
A market is said to be in equilibrium when
the quantity demanded equals the quantity supplied
In a market, the equilibrium price is determined by:
the interaction of both demand and supply
If a market shortage exists,
consumers will compete for the product by offering to pay more
When there is a surplus in a market, prices are likely to fall because:
buyers do not wish to buy as much as sellers want to sell
If a market surplus exists,
producers will compete for customers by reducing prices
If demand is constant, a leftward shift in the supply curve will result in:
a decrease in equilibrium quantity and a higher equilibrium price
If supply is unchanged, a decrease in the demand for soft drinks will cause equilibrium price to:
fall and equilibrium quantity to fall
If supply is constant, a decrease in the demand for potato chips will cause:
a decrease in the equilibrium price and a decrease in equilibrium quantity
If supply is unchanged, a rightward shift in the demand curve for gourmet ice cream will result in:
an increase in equilibrium quantity and a higher equilibrium price
In the market for web design services, when more companies desire web pages, the equilibrium
quantity of web design services increase
If a state decides to reduce the cost of college tuition, by providing more Pell grants to students, ceteris paribus, then the:
quantity demanded of a college education in the state will increase
A price ceiling is:
an upper limit on the price of a good
A market shortage is:
caused by a price ceiling
When a price ceiling is set for a market, the quantity demanded will be:
greater than the equilibrium quantity and price will be less than the equilibrium price
Rent controls are an example of:
a price ceiling
A price floor is:
a lower limit on the price of a good
In a market economy, the ___ determines who gets the goods and services produced
market mechanism
Refer to Figure 3.1. Consider the market for DVD players. People prefer watching movies on DVDs at home instead of going to the movie theater.
NOT C
The equilibrium price and quantity in Figure 3.2 are, respectively,
\$30 and 15 units
In Figure 3.2 the highest price at which buyers are willing and able to purchase 5 units is:
\$50
If the actual market price is held to \$10 per unit in Figure 3.3, there will be a:
shortage of 2 units
If the government wants to use a price ceiling to change the market outcome in Figure 3.3, it should choose a price of:
\$10
Which panel of Figure 3.4 represents the changes in the market for chicken when farmers use hormones to increase the production of chicken, but consumers are concerned about eating the chicken?
B
Which panel of Figure 3.4 represents the changes in the market for beef when the price of corn (cattle feed) rises and the Surgeon General reports that red meat contributes to coronary disease?
D
Which panel of Figure 3.4 represents the changes in the market for parking spaces when the student population increases on a college campus and one parking lot has been destroyed to build a new building?
C
In Table 3.1, if the price is \$4, the market,
experiences a shortage of 13 units
In Table 3.2, if the worldwide price of trucks is \$30,000, the truck market:
is in equilibrium
One HEADLINE article in the text, “Hurricane Sandy to Raise Prices on Used Cars” describes the impact of thousands of cars being destroyed by the storm. What will happen to the equilibrium quantity of used cars if the supply decreases?
decrease
If a product becomes more popular:
a. Which curve will shift?
b. Along which curve will price and quantity move?
c. At a new equilibrium, will price be higher or lower?
d. At a new equilibrium, will quantity be higher or lower?
a. demand
b. supply
c. higher
d. higher