Ch 3 Individual Markets: Demand And Supply

10 Questions  I  By Ecofanics
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Review for ch 3 McConnell and Brue 15 ed.

  
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1.  An increase in resource prices will tend to decrease supply.
A.
B.
2.  An increase in income will tend to increase the demand for a product.
A.
B.
3.  Demand is the amount of a good or service that a buyer will purchase at a particular price.
A.
B.
4.  The law of diminishing marginal utility is one explanation of why there is an incerse relationship between price and quantity demanded.
A.
B.
5.  A surplus indicates that the quantity demanded is less that the quantity supplied.
A.
B.
6.  The substitution effect suggests that, at a lower price, you have the incentive to substitute the more expensive product for similar products which are relatively less expensive.
A.
B.
7.  The rationing function of prices is the elimination of shortages and surpluses.
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B.
8.  Supply is a schedule that shows the amounts of a product a producer can make in a limited amount of time.
A.
B.
9.  If the supply of a product increases and the demand decreases, the equilibrium price and quantity will increase.
A.
B.
10.  If consumer tastes or preferences for a product decrease, the demand for the product will tend to decrease.
A.
B.
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