The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases.
quantity demanded, price
quantity supplied, quantity demanded
price, quantity demanded
price, quantity supplied
The nature of demand indicates that as the price of a good increases:
suppliers wish to sell less of it
more of it is produced
more of it is desired
buyers desire to purchase less of it
The term "ceteris paribus" means that:
everything is variable
all variable except those specified are constant
no one knows which variables will change and which will remain constant
what is true for the individual is not necessarily true for the whole
Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.
income gap
market equilibrium
law of demand
price model
_________________ refers to the total number of units that are purchased at that price.
quantity
quantity demanded
supply
market quantity
The demand curve for a typical good has a(n):
negative slope because some consumers switch to other goods as the price rises.
negative slope because consumer incomes fall as the price of the good rises.
negative slope because the good has less "snob appeal" as its price falls.
inverse slope because as the price goes up, the good has more profitability.
But nearly all supply curves share a basic similarity: they slope _______________.
down from left to right
up from left to right
up from right to left
down from right to left
When quantity demanded decreases in response to a change in price:
demand curve shifts to the right
demand curve shifts to the left
there is a movement down along the demand curve
there is movement up along the demand curve
The ___________ is the only price where quantity demanded is equal to quantity supplied.
equilibrium price
horizontal axis intercept
vertical axis intercept
market price
After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:
no change; only the supply curve for beef is likely to be affected.
a shift of the demand curve for beef to the left
a movement down along the demand curve for beef to the right.
a shift of the demand curve for beef to the right.
If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm’s profits will increase.
higher demand
lower costs of production
equilibrium
shift in demand
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
prices rise
equilibrium is achieved
costs of production fall
there is a population increase
A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:
the supply curve
the demand curve, as consumers try to economize because of the shortage
both supply and demand curve
the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price
A change in price of a good or service typically causes ___________________________ for that specific good or service.
a new equilibrium price
a change along the supply curve
the supply curve to shift
a decreased demand
According to the law of supply:
there is a direct relationship between price and the quantity supplied.
there is an inverse relationship between price and the quantity supplied.
there is a direct relationship between price and quantity demanded.
there is an inverse relationship between price and quantity demanded
Which of the following would reduce the supply of microcomputers?
a technological improvement that lowers the cost of producing the computers
higher wage rates for the workers that assemble the computers
a reduction in the price of computer chips used to produce the computers
a reduction in the price of computers.
Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."
The statement is correct.
The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied."
The statement is incorrect because it confuses a change in quantity supplied with a change in supply.
The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."
Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:
Andy's demand for pizza to increase.
Andy's demand for pizza to decrease.
Andy's quantity of pizza demanded to decrease.
Andy's demand for beer to increase.
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________
excess supply
excess demand
ceteris paribus
a price ceiling
The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price.
equilibrium quantity
demand schedule
supply schedule
