Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to
Correct answer(s):
- shift rightward.
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Which of the following pairs of goods are probably complements?
Correct answer(s):
- Ketchup and French fries.
Which of the following is probably not a normal good?
Correct answer(s):
- Intercity passenger bus travel.
The law of demand indicates that as the price of a good increases, the quantity that
Correct answer(s):
- buyers are able to purchase decreases.
In a competitive market, the market demand is Qd = 70 – 3P and the market supply is Qs = 6P. A price ceiling of $4 will result in a
Correct answer(s):
- shortage of 34 units.
Jane pays the market price of $69 for….
Correct answer(s):
- consumer surplus.
When government imposes a price floor above the market price, the result will be that
Correct answer(s):
- surpluses occur.
The word ‘imbibe’ means –
Correct answer(s):
- to drink
The word ‘homogeneous’ means –
Correct answer(s):
- of the same kind
Producer surplus is measured as the area
Correct answer(s):
- above the supply curve and below the market price.
If supply increases, then the
Correct answer(s):
- equilibrium price goes down.
If demand increases, then the
Correct answer(s):
- demand curve shifts to the right.
The minimum wage
Correct answer(s):
- is an example of floor price.
A floor price is
Correct answer(s):
- the minimum legal price that can be charged in a market.
When an effective price ceiling is in place
Correct answer(s):
- some consumers are better off and others are worse off.
Under a price ceiling, the full economic price is
Correct answer(s):
- higher than the free-market price.
A price ceiling is
Correct answer(s):
- the maximum legal price that can be charged in a market.
Competitive market equilibrium
Correct answer(s):
- is determined by the intersection of the market demand and supply curves.
When quantity demanded exceeds quantity supplied
Correct answer(s):
- the price is below the equilibrium price.
Producer surplus is the
Correct answer(s):
- area above the supply curve but below the market price of the good.