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ECON-1006EL Chapter Notes - Chapter 3: Normal Good, Nec, Demand Curve

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6 Dec 2016

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An economic model is a representation of economic reality that highlights particular variables and the relationships among them. The supply and demand model is not a general model of markets. It applies best to markets with many buyers and sellers of standardized product. Market: the context in which potential buyers and sellers of a good or service can negotiate exchanges. The market price of a good is determined by: Markets & prices: cost of production, value to the consumer, by both cost and value. Supply curve: a curve or schedule showing the total quantity of a good of uniform quality that sellers want to sell at each price during a particular period of time, provided all else is held constant. A supply curve shows the relationship between price and quantity supplied (per specific time period) and is upward sloping. Many points lie on this single curve, each point on the curve identifies a specific quantity.

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Related Questions

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve

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Each point on a supply curve represents?

a. The highest per-unit price sellers can get for each unit over time.

b. The highest per-unit price buyers will pay for the good.

c. The lowest per-unit price buyers will accept per unit of the good.

d. The lowest per-unit price for which a supplier is willing and able to sell a particular quantity.

Which of the following statements correctly describes a competitive market?

A) The market price for the same good varies from seller to seller.

B) Sometimes, a single seller has the ability to dictate the market price.

C) The market price is determined by the interaction of demand and supply.

D) Buyers and sellers negotiate prices before making exchanges.

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