Question 1

_______ occurs in a market when consumers are willing to buy more than producers are willing to sell, or can supply

Accepted Answer

The answer of _______ occurs in a market when consumers...

Question 2

When consumers find their incomes increasing, they tend to buy more _______.

Accepted Answer

The answer of When consumers find their incomes increasing, they...

Question 3

When a consumer's income decreases, that consumer tends to buy more _______.

Accepted Answer

The answer of When a consumer's income decreases, that consumer...

Question 4

Suppose that the price of apples decreases and the quantity of apples in the market decreases. Suggest two reasons why this might have happened.

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The answer of Suppose that the price of apples decreases...

Question 5

As the price of a product rises, the demand for the product falls.

Accepted Answer

The answer of As the price of a product rises,...

Question 6

An increase or decrease in population will increase or decrease demand.

Accepted Answer

When population increases, it leads to an increase in demand for goods and services. Similarly, when population decreases, it decreases the demand for goods and services. This is because a greater population requires more goods and services to accommodate their needs, resulting in higher demand. Conversely, a smaller population demands fewer goods and services, resulting in lower demand.

Question 7

A surplus occurs when producers are willing to sell more than consumers are willing to buy. This is called an _______.

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The answer of A surplus occurs when producers are willing...

Question 8

What is the difference between a "shift in the supply curve" and a "movement along the supply curve"?

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The answer of What is the difference between a "shift...

Question 9

A permanent excess supply of a product is possible when the government sets a minimum price that is _______than the equilibrium price.

Accepted Answer

The answer of A permanent excess supply of a product...

Question 10

Complementary goods are goods that are normally consumed together.

Accepted Answer

Complementary goods are goods that have a strong relationship because they are consumed together. For example, bread and butter or shoes and socks are complementary goods.

Question 11

People will buy more of an inferior good when their income decreases.

Accepted Answer

This is because an inferior good is one whose demand increases as income decreases, due to its cheaper price compared to other goods. As people have less money to spend, they may choose to buy more of an inferior good to meet their basic needs at a lower cost. Examples of inferior goods include generic brands and fast food.

Question 12

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?

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The answer of Draw a graph to illustrate the effect...

Question 13

What is a "change in quantity demanded"? How is a "change in quantity demanded" illustrated in a demand diagram?

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The answer of What is a "change in quantity demanded"?...

Question 14

Use the supply and demand model to explain why it is difficult to find an on- campus parking space during peak mid- day times, although it is much easier to find a parking space during less popular evening hours.

Accepted Answer

The answer of Use the supply and demand model to...

Question 15

The substitution effect of a price change implies that as the price of a good falls, people are likely to buy less of the good whose price has fallen.

Accepted Answer

The substitution effect of a price change implies that as the price of a good falls, people are likely to buy more of that good and less of other substitute goods whose prices remain the same or have increased.

Question 16

When a consumer's income increases, that consumer tends to buy more _______ .

Accepted Answer

The answer of When a consumer's income increases, that consumer...

Question 17

If the cost of producing a product goes down, this will cause the equilibrium price of the product to go down and the equilibrium quantity of the product to go up.

Accepted Answer

According to the law of supply and demand, a decrease in production costs will lead to an increase in the supply of the product, causing the equilibrium price to decrease and the equilibrium quantity to increase. This is because producers can now offer the product at a lower price without reducing their profit margins, which attracts more buyers to the market and increases demand.

Question 18

When a government pays a company for producing a product or good with the result that selling the product is more profitable regardless of the price so that the company will produce more of it, it is called a _______.

Accepted Answer

The answer of When a government pays a company for...

Question 19

Governments often get involved in creating a market equilibrium by setting a maximum price that is less than the equilibrium price, resulting in a permanent excess demand for the products.

Accepted Answer

When a government sets a maximum price below the equilibrium price, it creates a price ceiling, leading to a shortage as the quantity demanded exceeds the quantity supplied.

Question 20

What is the difference between "an increase in supply" and "an increase in quantity supplied" of a good?

Accepted Answer

The answer of What is the difference between "an increase...

Quiz 4: Demand, Supply, and Market Equilibrium