Chapter 3 Econ Quiz

Gasoline prices increase by 50 percent and other things remain the same. As a result, there is

a decrease in quantity of gasoline demanded

a supply curve

slopes upward from left to right ; is a graph of that relationship between quantity supplied of a goods and its price

The law of supply states that, other things constent,

if the price of a good increases, the quantity supplied increases.

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel (i.e., they are related goods). If the price of diesel fuel falls, there is:

an increase in the supply of home heating oil

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ which causes the price of a computer chip to ________.

decreases; falls

Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price a

surplus exists and the price would have to fall to restore equilibrium.

market equilibrium occurs when

the quantity demanded equals the quantity supplied

___________________ are maximum prices that sellers can charge for products.

price ceilings