Chapter 4 Supply & Demand

Question 0

Competitive market

Answer 0

One with many buyers and sellers has effect on price

Question 1

Market

Answer 1

A group of buyers and sellers

Question 2

Perfectly competitive

Answer 2

All goods are exactly the same

Price takers

Question 3

Normal good

Answer 3

Increase income increases the demand

Question 4

Inferior

Answer 4

Increase income decrease on demand

Question 5

Substitutes

Answer 5

An increase in the price of one causes an increase in demand for the other

Question 6

Complement

Answer 6

An increase in price of one causes a fall in demand for the other

Question 7

Tastes

Answer 7

Taste towards a good will increase demand for that good

Question 8

Expectations

Answer 8

If people expect their income to increase, their demand for expensive restaurants will increase
Worried about jobs lower demand for autos

Question 9

Input prices

Answer 9

Wages, pieces of raw materials

Fall in input prices shifts a curve to the right

Question 10

Technology

Answer 10

Same as fall in input prices

Shifts a curve to the right

Question 11

of sellers

Answer 11

An increase in the number of sellers increases the quantity supplied at each price
Shifts the s curve to the right

Question 12

Expectations

Answer 12

May hold on to their supply when the price increases etc

Question 13

Surplus

Answer 13

Quantity supplied is greater than demand

Question 14

Shortage

Answer 14

Quantity demanded is greater than supply