Exam 3: Supply and Demand: Theory

A surplus will occur in a market when the price of the product is greater than the equilibrium price.

Which of the following will not shift a supply curve?

If the supply curve and the demand curve for lettuce both shift to the left by an equal amount,what can we say about the resulting changes in equilibrium price and quantity?

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve is shorter than the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.

Supply curves are usually upward sloping.

One reason that helps to explain the law of demand is the law of

Assume that computers and software are complements.If the ____________ computers decreases,the price of computers will _______ and the demand for software will _____________,ceteris paribus.

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

At a price above the equilibrium price,there is

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Demand takes into account goods,but not services.

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

An "increase in the quantity demanded" means that

A change in price will lead to a change in __________ and to a change in __________,while a change in government subsidies will lead to a change in __________ and a change in the number of buyers will lead to a change in __________.

To an economist,an increase in demand means the same thing as an increase in quantity demanded.

Suppose that the average price of refrigerators has fallen over the past few years,yet the refrigerator companies have offered more and more of them for sale.Does this mean that the supply curve for refrigerators is downward sloping? Explain.

-Refer to Exhibit 3-17.At a price of $16,the quantity demanded of good X is ____________ than the quantity supplied of good X,and economists would use this information to predict that the price of good X would soon ______________.This would push the price __________ the equilibrium price.

If the government increased licensing requirements for beauty salons,the supply curve for salon services would shift to the left.

On a supply-and-demand diagram,equilibrium is found

-Refer to Exhibit 3-6.If an increase in income causes the demand for good X to shift from D₁ to D₂,then good X is