AUECO101 Chapter Notes - Chapter 4: Supply And Demand, Demand Curve, Economic Equilibrium

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sapphiredonkey827

20 May 2017

School

University of Alberta

Department

Augustana Faculty - Economics

Course

AUECO101

Professor

Yasser Fahmy

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Document Summary

Change in quantity demanded: movement along the demand curve, cause by a change in the price of the product, demand curve does not change. Nicole sanchez: a change in the price of a commodity leads to a movement along the demand. Consumer income: as income increases, the demand for a normal good will increase, as income increases the demand for an inferior good will decrease. Shifts right: increase in demand, shifts left: decrease in demand: prices of related goods. When a fall in the price of one good reduces the demand for another good, the two goods are called substitutes. When a fall in the price of one good increases the demand for another good, the two goods are called complements. Caused by any change that alters the quantity demanded at every price. Quantity supplied is the amount of good that the sellers are willing and able to sell.

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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7) Indicate whether each of the following statements is true or false, and explain why.

A. Producer surplus tends to fall as the supply curve becomes more elastic.

B. Consumer surplus tends to rise as demand becomes more elastic.

C. The market demand curve indicates the minimum price buyers are willing to pay at each level of production.

D. The market supply curve indicates the minimum price required by sellers as a group to bring forth production.

E. Consumer surplus is the amount that consumers are willing to pay for a given good or service above and beyond the amount actually paid.

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The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

all nonprice determinants of demand are held constant.

only price is held constant.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

	a.	there is a movement along a given demand curve.
	b.	the demand curve shifts in the opposite direction.
	c.	the supply curve shifts in the opposite direction.
	d.	the demand curve shifts in the same direction.

AUECO101 Chapter Notes - Chapter 4: Supply And Demand, Demand Curve, Economic Equilibrium

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