Chapter 3 Flashcards
The term quantity demanded refers to _____ purchases by consumers, whereas quantity exchanged refers to _______ purchases by consumers.
desired, actual
Quantity demanded refers to the quantity of widgets demanded ______. “The quantity demanded of widgets is 1000 units” is not meaningful unless we know the _____ over which the 1000 units are demanded. Quantity demanded is a(n) _________.
per period of time, time period, flow variable
What distinguishes a flow from a stock in economic terms?
A. Flow represents a quantity at a specific point in time, while stock represents a quantity measured over a period.
B. Flow represents a quantity measured over a specific period of time, while stock represents a quantity at a specific point in time.
C. Flow and stock are terms used interchangeably in economics.
D. Flow and stock both refer to quantities measured at a specific point in time.
B. Flow represents a quantity measured over a specific period of time, while stock represents a quantity at a specific point in time.
What is the key distinction between demand and quantity demanded in economics?
A. Demand refers to the entire relationship between price and quantity, while quantity demanded represents a specific quantity at a given price.
B. Demand and quantity demanded are two terms for the same concept.
C. Quantity demanded refers to the entire relationship between price and quantity, while demand represents a specific quantity at a given price.
D. Demand and quantity demanded are unrelated concepts in economic analysis.
A. Demand refers to the entire relationship between price and quantity, while quantity demanded represents a specific quantity at a given price.
A demand curve represents the relationship between ________ and _____, ceteris paribus.
A. Quantity demanded; income
B. Price; quantity demanded
C. Supply; demand
D. Cost; production
B. Price; quantity demanded
Identify the five important causes of shifts in the demand curve. (Select all that apply.)
A. Consumers’ Income
B. Prices of Other Goods
C. Population
D. Consumers’ Tastes
E. Significant Changes in Weather
F. Number of Sellers
G. Price of Inputs
a, b, c, d, e
Are the following two observations inconsistent?
* Rising demand for housing causes prices of new homes to soar.
* Many families refuse to buy homes as prices become prohibitive for them.
The observations are:
A. inconsistent because in the first one the demand increases and in the second one the demand decreases due to higher prices.
B. inconsistent because due to rising demand prices will become too high and no one will be buying homes.
C. consistent because rising demand will shift the demand curve and higher prices will cause movement along the demand curve.
D. consistent because both of them apply to movements along the demand curve.
C. consistent because rising demand will shift the demand curve and higher prices will cause movement along the demand curve.
For a normal good, an increase
in consumer income will result in the:
A. supply curve shifting to the right.
B. demand curve shifting to the right.
C. supply curve shifting to the left.
D. demand curve shifting to the left.
B. demand curve shifting to the right.
Quantity demanded is the:
A. product of advertising, and is unrelated to price.
B. total amount of a good that is actually purchased during a given period of time.
C. entire relationship between desired purchases and possible prices.
D. desired quantity that refers to a flow of purchases expressed as so much per period of time.
E. total amount of a good that people wish to sell, regardless of price.
D. desired quantity that refers to a flow of purchases expressed as so much per period of time.
The term quantity supplied refers to _____________ sales by producers, whereas quantity exchanged refers to ___________ sales by producers.
A. Potential; actual
B. Planned; executed
C. Actual; potential
D. Projected; realized
C. Actual; potential
Quantity supplied refers to the quantity of widgets supplied ________________. The quantity supplied of widgets is 1000 units” is not meaningful unless we know the ______________ over which the 1000 units are supplied. Quantity supplied is a(n) __________.
per period of time, time period, flow variable
A supply curve represents the relationship between ______________ and _________ ceteris
paribus.
The positive slope indicates that when the price increases, quantity supplied ___________.
quantity supplied, price, increases
Identify six important causes of shifts in the supply curve. (Select all that apply.):
A. Technology
B. Government Taxes or Subsidies
C. Consumer’s Tastes
D. Prices of other products
E. Population
F. Number of Suppliers
G. Significant changes in weather
H. Price inputs
a,b,d,f,g,h
Consider the world supply of cocoa beans, the main input in the production of chocolate. For each of the events listed below, state and explain the likely effect on the supply of cocoa beans. How would each event be illustrated in a diagram?
A. Unexpected growing conditions lead to a poor yield
of cocoa beans in Ivory Coast, the largest supplier of cocoa beans.
The world supply curve of cocoa beans would ________________, since this event would ________________.
B. There is a dramatic
fall in the world price of coffee beans. Assume that farmers growing cocoa beans can easily grow coffee beans instead. The world supply curve of cocoa beans would _____________________, since this event would ____________________.
C. Wages for farm labour in cocoa-growing regions rise. The world supply curve of cocoa beans would _______________, since this event would _________________.
D. Farmers in various parts of the world see losses being taken by cocoa farmers and choose to leave this industry. The world supply curve of cocoa beans would ________________, since this event would _________________.
A. shift to the left, decrease the quantity supplied at every price.
B. shift to the right, increase the quantity supplied at every price.
C. shift to the left, decrease the quantity supplied at every price.
D. shift to the left, decrease the quantity supplied at every price.
Steel is needed to produce automobiles. If the price of
steel falls:
A. the supply curve of steel shifts to the left.
B. there is a movement along the supply curve of automobiles
C. the supply curve of steel shifts to the right.
D. the supply curve of automobiles shifts to the left.
E. the supply curve of automobiles shifts to the right.
E. the supply curve of automobiles shifts to the right.
