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Chapter 2: Competitive markets: demand and supply Flashcards | StudBud
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Chapter 2: Competitive markets: demand and supply
Chapter 2: Competitive markets: demand and supply
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Answers
1
Joint supply of two or more products refers to production of goods that are . . .
Exactly the same
Homogeneous
Substitutes
Derived from a single product.
2
If the demand curve shifts to the left and the supply curve shifts to the right, what happens?
The market price decreases
The equilibrium quantity increases
The equilibrium quantity decreases
The market price increases
3
What might cause the demand curve to shift to the left? (from D1 to D3)
The price of the substitute decreased.
The price of the complementary good decreased.
The resources to produce this product become more expansive.
A lot of people have immigrated to other countries.
4
When the whole industry go through contraction, the supply curve of goods in that industry
Vanishes
Shifts to the right
Remains the same
Shifts to the left
5
In this market, a price of 20 will cause
A surplus of 10 units
Equilibrium
A shortage of 5 units
A shortage of 10 units
6
The market equilibrium is currently at A. If the price of the substitute decreases . . .
The market equilibrium remains the same
The demand curve shifts to the left
The market equilibrium moves to point B
The demand curve shifts to the right
7
What determines the demand curve to typically have a negative slope?
Marginal utility theory
Law of demand
Economy of Scale
Marginal social benefit
8
What is the relationship between the quantity supplied and the price over a period of time?
Negative causal relationship
Indirectly proportional relationship
Positive causal relationship
Directly proportional relationship
9
The supply curve illustrate an important relationship: as price increases, quantity supplied
Increases
You won't choose this one
Decreases
Remain the same
10
Which of the followings is not a non-price determinant of supply?
Technology
Producer expectation
Substitutes
Subsidy
11
Which area represents consumer surplus?
B
A
C
D
12
If the price of the gasoline increases, what happens to the demand of automobile?
The price increases
The demand curve shift to the left
The demand curve shift to the right
The price decreases
13
What is demand? (A easy question)
The demand are the willingness and ability to buy the good.
The demand are the will and ability to buy the good.
The demand is the willingness and ability to buy the stuff.
The demand is the willingness and ability to buy the good.
14
In the graph below, which area represents producer surplus?
D
C
B
A
15
What is market?
An arrangement for all kinds of business activities.
A place that will make America great again
A place to buy and sell products, services, and resources
An arrangement where buyers and sellers engage in exchange
16
Market supply of a good is . . .
A particular quantity a firm is able and willing to produce
The ability and willingness of a firm to produce the good
The sum of all individual supplies of that good.
The supply of a supermarket over time.
17
Which are the examples of joint supply?
Coffee and sugar
Gold and silver
Ivory and elephant ears
Apples and pens
18
How many units of chocolate bars are demanded at $4 in four weeks?
1
8
16
4
19
Which two questions are related to allocative efficiency and productive efficiency respectively
How to produce and what to produce
How to produce and for whom to produce
For whom to produce and how to produce
What to produce and how to produce
20
What is allocative efficiency?
Producing the combination of goods most wanted by society
Producing the combination of goods least wanted by society
Producing the minimum amount of goods with certain resources
Producing the maximum amount of goods with certain resources
21
In a perfectly competitive market . . .
Every producer gains profit
No one controls the price
The social benefit is maximized
The demand curve is a flat line for individual producers
22
Social welfare . . .
Is not related to microeconomic, but more related to macro.
Can be maximized when MSB=MSC
Can be maximized by the free-market
Is the sum of consumer surplus & producer surplus
23
If the demand curve of an inferior good shifted to the right, what probably happened?
People's income has increased
Less people prefer those goods now
People's income has decreased
More people prefer those goods now
24
If the demand curve and the supply curve both shifts to the left, what happens?
The equilibrium quantity increases
The market price increases
The equilibrium quantity decreases
The market price decreases
25
D1 is the current demand curve. Which of the options are incorrect?
Donald Trump won, so D1 shifts to D2
Consumers expect the price to increase, so D1 shifts to D2
The price of the substitute decreases, so D1 shifts to D2
More people immigrated into the country, so D1 shift to D2
