Ch 3 Quizes Flashcards Preview

Micro 130 B > Ch 3 Quizes > Flashcards

Flashcards in Ch 3 Quizes Deck (13):
1

Describe a market system:

It is a system that allows buyers and sellers to interact with one another.

2

As a result of a decrease in the price of MP3 music, consumers download more songs and buy fewer CDs. This is an illustration of:

The substitution effect.

3

A decrease in demand is shown graphically as a:

Shift of the demand curve to the left.

4

A decrease in supply, holding demand constant, will cause:

Higher prices and a smaller quantity sold.

5

An increase in demand and a decrease in supply will:

Increase price and affect the equilibrium quantity in an indeterminate way.

6

A black market could arise as a result of:

A legal price ceiling below the equilibrium price.

7

A demand curve shows the relationship between:

price and quantity demanded.

8

If supply increases and demand decreases, equilibrium price will rise, fall, or remain unchanged?

Fall.

9

One can say with certainty that equilibrium price will decline when supply:

Increases and demand decreases.

10

The satisfaction or pleasure one gets from consuming a good or service is:

Utility.

11

If total utility is increasing, then marginal utility:

Declining.

12

The marginal utility of a second copy of today's newspaper taken from a newspaper vending machine is:

Close to zero.

13

An increase in price results in a reduction in total revenue means?

Demand is inelastic.