630. Micro. Ch8.

Question 1

What is the vertical axis if a demand curvet?

Answer 1

Price

Question 2

A change is price i show as ___ and results in a change in ___.

Answer 2

movement along a given demand curve

quantity demanded

Question 3

Price and Quantity demanded have a ___ relationship.

Answer 3

Inverse

Question 4

A shift in demand curve can occur because:

Answer 4

uncontrollable factors: out of company’s control ( inomce, weather, interest rates, prices of substitute and complementary products produce by other companies

Question 5

Define uncontrollable factor regarding demand curve shifts.

Answer 5

out of company’s control

Question 6

Define controllable factors regarding demand curve shifts

Answer 6

something a company controls (advertsigin, warranties, product quality, distribution speed, etc…

Question 7

A demand increase moves ___. A change in demand moves ___.

Answer 7

the demand curve

Question 8

Supply curves describe the ___ of a group of sellers and tell you ___ at a give price.

Answer 8

behavior

how much will be sold

Question 9

Supply curves slope ___.

Answer 9

upward

Question 10

Quantity refers to moving ___.

Answer 10

along the curve

Question 11

Change in quantity supplied vs. change in supply.

Answer 11

A change in price i son the vertical axis of a demand curve graph, a change in price is show as movement along a given supply curve and result in a change in quantity supplied

Question 12

Shift off the ___ result from changes in sellers’ perceptions and can occur ___.

Answer 12

supply

for a multiple of reasons

Question 13

Reasons for shift in supply curve:

Answer 13

taxes
subsidies
prices of tore goods produce by the seller
resource costs
number of sellers
technological changes
change in expectation of future sales

Question 14

If the cost of plastic goes up, bottled water supply curve moves ___.

Answer 14

to the left.

Question 15

if the government begins subsidizing production of bottled water, the supply curve shifts ___.

Answer 15

to the right.

Question 16

We characterize the behavior of sellers with a ___.

Answer 16

supply curve

Question 17

Market equilibrium

Answer 17

is the price at which the market quantity supplied equals the market quantity demanded

Question 18

If price is above equilibrium, there will be a ___.

Answer 18

surplus

know how to draw a surplus

Question 19

downward sloping curve

Answer 19

demand

Question 20

upward sloping curve

Answer 20

supply

Question 21

where demand intersects price

Answer 21

equilibrium

Question 22

If price is above equilibrium

Answer 22

surplus / excess supply

if you have extra inventory, downward pressure on price until it reaches equilibrium

Question 23

if price is below equilibrium

Answer 23

shortage / excess demand

if you don’t have enough inventory, upward pressure on price until it reaches equilibrium

Question 24

when there is no pressure for the price to rest or fall

Answer 24

equilibrium price

because the Q demanded equals the Q supplied (no shortage or surplus)

Question 25

On a table how do you know where equilibrium is?

Answer 25

where supply and demand are the same

Question 26

New equilibrium happens when __.

Answer 26

there is a shift in the demand or supply curve

Question 27

If demand curve shifts to the right and price stays the same you have a ___.

Answer 27

shortage

Question 28

If the question deals with equilibrium, you need ___.

Answer 28

both curves

Question 29

for bottled water, if the cost of plastic goes up, then ___.

Answer 29

price goes up | supply curve shifts lift

Question 30

if the change only affects sellers, then only the ___ is affected

Answer 30

supply curve

Question 31

a decrease in supply and increase in quantity demanded

Answer 31

supply curve is shifting left

Question 32

an increase in demand and increase in quantity supplied

Answer 32

demand curve is shifted to the right

Question 33

an increase in demand and increase in quantity supplied

Answer 33

demand curve is shifted to the right

Question 34

if demand increases and price stays the same

Answer 34

you have a shortage

Question 35

upward pressure on prices

Answer 35

shortage

Question 36

consumption issue

Answer 36

diminishing marginal utility

Question 37

production issue

Answer 37

law of diminishing marginal returns

Question 38

demand and supply curves represent the ___ not a ___

Answer 38

industry | company

Question 39

3 aspects of a market

Answer 39

time product geography

Question 40

if income goes up of buyers, the demand curve is ___. Then there is a ___ in demand and an ___ in price.

Answer 40

shifted to the right increase in demand increase in price

Question 41

if income goes up of buyers, the demand curve is ___. Then there is a ___ in demand and an ___ in price.

Answer 41

shifted to the right increase in demand increase in price P up / Q up

Question 42

if technology improves and the price of manufacturing goes down, the supply curve moves ___

Answer 42

to the right P dn / Q up

Question 43

if both supply and demand are shifting, you can't ___

Answer 43

definitively say what is happening to one of the variables unless you have information

Question 44

An uncontrollable factor is something that affects demand that a company ___ control.

Answer 44

cannot

Question 45

Suppose there there is an increase in the price of a substitute for bottled water. What happens tho the equilibrium price and quantity of bottled water?

Answer 45

Demand shifts right Pe up Qe up since the price of the substitute went up, people want more bottled water and will pay more for it.

Question 46

Suppose there is new tax paid by the producers of bottled water for each bottle sold. Show a new demand/supply curve. What would happen to the equilibrium price and quantity of battled water?

Answer 46

Supply curve moves bc change affects supplier. Supply curve moves left Price up Quantity produces dn higher equilibrium price lower equilibrium quantity

Question 47

draw a demand curve showing the market for one-day ticket to Disneyland with an initial price of $100 per ticket and initial quantity of 44,000 tickets. a) If price is lowered to $80, show. b) if new ride, show

Answer 47

a) if price is lowered, Q increases | b) if new ride, demand increases

Question 48

would holding a patent make a product inelastic?

Answer 48

yes, because there are no substitutes