Econ 200: Chapter 3

An economy organized by private individuals making decisions, rather than a centralized planning authority is referred to as a free _____________ economy.

market

The term _____________ (one word) refers to the buyers and sellers who trade a particular good or service

markets

In a competitive market, _____________ easily trade a standardized product.

a. well-informed, price-taking buyers and sellers

b. well-informed, price-making buyers and sellers

c. a single buyer and all the sellers

d. a large number of buyers and a single seller

a. well-informed, price-taking buyers and sellers

Demand describes

a. how much of something people want and are able to sell under certain circumstances.

b. how much of something people want and are able to buy under certain circumstances.

c. how much of something people need to sell under certain circumstances.

d. how much of something people need to buy under certain circumstances.

b. how much of something people want and are able to buy under certain circumstances.

A ________ is a table that shows the quantities of a particular good or service that consumers are willing and able to purchase at various prices.

a. supply schedule

b. supply curve

c. demand curve

d. demand schedule

d. demand schedule

An economy organized by private, decision-making individuals is called

a. a command economy

b. a market economy

c. a control economy

d. a mixed economy

b. a market economy

If one of the non-price factors that determines demand changes,.

a. the supply curve shifts

b. quantity supplied shifts

c. the demand curve shifts

d. quantity demanded shifts

c. the demand curve shifts

In economics, the term market refers to

a. neither the physical location nor the buyers and sellers.

b. the buyers and sellers themselves.

c. the physical location where a trade occurs.

d. both the physical location and the buyers and sellers.

b. the buyers and sellers themselves.

When one of the five nonprice determinants of demand changes, the demand curve

a. pivots out from the x-axis

b. pivots in from the y-axis

c. shifts right or left.

d. gets steeper.

c. shifts right or left.

______________ describes how much of something people want to buy under certain circumstances.

demand

A demand schedule shows the quantities of a particular good or service that ________________ are willing and able to purchase at various prices.

consumers

If one of the non-price factors that determines demand changes, the demand curve will ______________.

shift

When demand changes, it

a. pivots left.

b. shifts horizontally.

c. becomes steeper.

d. pivots right.

b. shifts horizontally

A table showing the quantities of a particular good or service that consumers are willing and able to purchase at various prices is

a. a demand schedule.

b. a demand curve.

c. usually shown for a given price.

d. usually the same as supply.

a. a demand schedule.

In economics, buyers and sellers who trade a particular good or service are referred to as

a. demand

b. a market

c. equilibrium

d. supply

b. a market

Which of the following describes how much of a good or service producers will offer for sale under given circumstances?

a. quantity demanded

b. supply

c. demand

d. quantity supplied

e. answers b & d (supply and quantity supplied)

e. answers b & d (supply and quantity supplied)

A table showing the quantities of a particular good or service that

a. a demand schedule.

b. usually shown for a given price.

c. usually the same as demand.

d. a supply schedule.

d. a supply schedule.

When there is a change in one of the nonprice determinants of supply,

a. the supply curve shifts.

b. the supply curve is vertical.

c. there is a movement along the supply curve.

d. the demand curve shifts.

a. the supply curve shifts.

When there is a shift of the supply curve,

a. the demand curve gets flatter.

b. there is a movement along the supply curve.

c. price changes affect the quantity demanded at each price.

d. price changes affect the quantity supplied at each price.

d. price changes affect the quantity supplied at each price.

The convergence of supply with demand happens at a point called the market __________________.

equalibrium

The concept of supply describes how much of a good or service

a. consumers will buy under given circumstances.

b. consumers will offer for sale under given circumstances.

c. producers will offer for sale under given circumstances.

d. how much of a good or service producers will buy under given circumstances.

c. producers will offer for sale under given circumstances.

A supply schedule shows the quantities of a particular good or service that ____________ are willing to supply at various prices.

producers

When there is a surplus,

a. the quantity supplied is higher than the quantity demanded.

b. there is equilibrium.

c. the quantity supplied is lower than the quantity demanded.

d. the quantity supplied is equal to the quantity demanded.

a. the quantity supplied is higher than the quantity demanded.

The entire supply curve will shift when there is

a. a change in a nonprice determinant of supply.

b. a change in income.

c. a change in demand.

d. a change in the quantity demanded.

a. a change in a nonprice determinant of supply.

If the price of land-line phone service suddenly skyrockets, then the

a. demand for cell phones will shift to the right.

b. supply of cell phones will shift to the right.

c. supply of cell phones will shift to the left.

d. demand for cell phones will shift to the left.

a. demand for cell phones will shift to the right.

A change in quantity supplied is due to a change in _______.A change in supply is due to a change in _________.

a. non-price determinants of supply; non-price determinants of supply

b. non-price determinants of supply; price

c. price; price

d. price; non-price determinants of supply

d. price; non-price determinants of supply

The market equilibrium is the point where

a. quantity demanded does not change.

b. price does not change.

c. the demand curve intersects the supply curve.

d. price equals quantity.

c. the demand curve intersects the supply curve.

When the quantity supplied is higher than the quantity demanded, we say that there is a(n)

a. excess demand.

b. surplus.

c. shortage.

d. equilibrium.

b. surplus.

If the price of land-line phone service suddenly skyrockets, then in the cell phone market, ________.

a. the equilibrium price will decrease but the equilibrium quantity will increase

b. the equilibrium price and quantity will increase

c. the equilibrium price and quantity will decrease

d. the equilibrium price will increase but the equilibrium quantity will decrease

b. the equilibrium price and quantity will increase

Consider shopping for cucumbers in a farmers' market. For the statement below, note which characteristic of competitive markets the statement describes:

All of the farmers have their prices posted prominently in front of their stalls.

full information

Consider shopping for cucumbers in a farmers' market. For the statement below, note which characteristic of competitive markets the statement describes:

Cucumbers are the same price at each stall.

price-takers

Consider shopping for cucumbers in a farmers' market. For the statement below, note which characteristic of competitive markets the statement describes:

There is no difficulty moving around between stalls as you shop and choosing between farmers.

no transaction costs

Consider shopping for cucumbers in a farmers' market. For the statement below, note which characteristic of competitive markets the statement describes:

You and the other customers all seem indifferent about which cucumbers to buy.

standardized goods

Consider the market for corn. Indicate whether the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction.

A drought hits corn-growing regions, cutting the supply of corn.

movement along the demand curve

Consider the market for corn. Indicate whether the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction.

The government announces a new subsidy for biofuels made from corn.

rightward shift of demand

Consider the market for corn. Indicate whether the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction.

A global recession reduces the incomes of consumers in poor countries, who rely on corn as a staple food (assuming corn is a normal good).

leftward shift of demand

Consider the market for corn. Indicate whether the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction.

A new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre.

shift along the demand curve

Consider the market for corn. Indicate whether the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction.

An advertising campaign by the beef producers' association highlights the health benefits of corn-fed beef.

rightward shift of demand

Name the factor that affects demand and its impact on your demand for a new cell phone.

You hear a rumor that a new and improved model of the phone you want is coming out next year.

expectations; demand will decrease

Name the factor that affects demand and its impact on your demand for a new cell phone.

Your grandparents give you $500.

income; demand will increase

Name the factor that affects demand and its impact on your demand for a new cell phone.

A cellular network announces a holiday sale on a data package that includes the purchase of a new smartphone.

price of a related good; demand will increase

Name the factor that affects demand and its impact on your demand for a new cell phone.

A friend tells you how great his new phone is and suggests you get one too.

consumer preferences; demand will increase

When a non-price factor changes- such as income, expectations, prices of related goods, consumer preferences, or the number of buyers, there is a change in:

demand and the entire curve shifts

When there is a change in the specific numerical quantity demanded due to a change in price, this is referred to as a change in:

quantity demanded and the demand curve does not shift