Chapers 3 and 4 Flashcards
According to the law of demand, the quantity of a good demanded in a given time period
increases as its price falls, ceteris paribus
Ceteris paribus, if the price of a digital camera rises, then we can expect
a decrease in the quantity demanded of digital cameras (movement along the same curve)
Ceteris paribus, if the price of Swiss cheese falls, then we will see
an increase in the quantity demanded of Swiss cheese
Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of candles?
A decrease in the price of candles
Ceteris paribus, if the price of basketballs rises, then we will see
A movement to the left along the demand curve for basketballs
Which of the following would generally cause an increase in the demand for automobiles (outward shift in the demand curve or a shift to the right in the demand curve?)
an increase in consumer’s income
If buyers expect the price of baseballs to fall in the future, then right now there should be
a decrease in the demand for baseballs
Assume Pepsi and Coke are substitutes. An increase in the price of one will result in
an increase in the demand for the other
If there are only two airlines that fly between Dallas and New Orleans, what will happen int he market for one airline if the other one goes out of business?
The demand curve will shift to the right
Peanut butter and jelly are complements. A decrease in the price of one will result in
an increase in the demand for the other
Given a downward-sloping market demand curve for web design services, if the price of web design services is decreased from $12 per hour to $9 per hour then
the quantity demanded for web design services will increase
An increase in the price of a good causes a
movement up along the same supply curve
Which of the following is most likely to cause an increase in the quantity supplied of candles (movement along the same curve)?
An increase in the price of candles
Which of the following events would cause a rightward shift in the market supply of automobiles?
A technological improvement which reduces the cost of production
If corn and wheat are alternative pursuits for a farmer, a change in the supply of corn will take place when
the price of wheat changes
Which of the following can change without shifting either demand or supply curves
the price of the good itself
If there is a surplus at a given price then
that price is greater than the equilibrium price
In most markets, the equilibrium price is achieved through
trial and error
If the quantity demanded of a good is greater than the quantity supplied of the good at the current price, then in the long run (remember w/out govt. intervention in this market)
price will increase until it reaches the equilibrium price
Assuming the demand curve remains the same, an increase in the number of sellers of running shoes causes equilibrium price to
decrease and equilibrium quantity to increase
Assume peanut better and jelly are complements. An increase in the price of peanut better jelly will cause the equilibrium price to
decrease and the quantity to increase
Suppose a hurricane hits Florida causing widespread damage to houses and businesses. The governor of Florida places a price ceiling on all building materials to keep the prices reasonable. Which of the following is the most likely result?
shortage of building materials long lines at lumber stores, a slower recovery from the storm (all of the above)
After a major snowstorm last winter, some college students earned extra money by clearing driveways of snow fro $25. Town officials determined that $25 was too high and set a price ceiling of $15 for this service. Which of the following was the most likely result?
Fewer driveways were cleared
Assuming Coca-Cola and Pepsi-Cola are substitute goods, the effect of an increase in the price of Coca-Cola would cause which of the following?
A rightward shift in the demand curve for Pepsi-Cola
Decreasing the level of a subsidy (a supply curve shifter) to an industry by the government would result in
a leftward shift of the supply curve
The law of supply states that when the price of a commodity rises, the quantity supplied of that commodity rises too and vice versa, ceteris paribus, which means that
two variables are changing and everything else is being held constant
Decreasing a tax on an industry by the government would result in
a rightward shift of the supply curve
T/F? When the number of buyers in market changes, the market-deman curve for goods and services shifts
True
T/F? A decrease in the price of personal computers would shift the demand curve for personal computers to the right (increase in demand).
False
There are never shortages or surpluses when the price in a market is equal to the equilibrium price for the market
True
As one moves down the demand curve for carrots, the quantity demanded for carrots increases and the price of carrots decreases
True
