ECO101H1 Lecture Notes - Lecture 3: Inferior Good, Market Price, Dysgeusia

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Supply and demand: a model of a competitive market. Competitive market is market in which there are many buyers and sellers of the same goods and services. When a market is competitive, its behaviour its well described by the supply and demand model. Is a model of how a competitive market behaves. Five key elements of this model a. b. c. d. e. The set of factors that cause the demand and the supply curve to shift. The market equilibrium, which includes the equilibrium price and. The way the market equilibrium changes when the supply or demand equilibrium quantity curve shifts. The demand depends on the good or service that people want to buy, depend on the price. The higher the price, the less of the good or service people want to purchase, on the other hand, lower the price, the more they want to purchase.

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

ceruleanseal203

Recently the government imposed a new requirement that gasoline contains 10% ethanol; the ethanol is made from corn. This new government ethanol mandate has affected the market for cereal made from corn (such as corn flakes and Captain Crunch).

a) According to the competitive market model, how do the government's new ethanol requirement affect the equilibrium average price and quantity of cereal made from corn in the U.S.? Do corn-based cereal prices rise, or fall, or stay the same? Does the equilibrium quantity of boxes of corn-based cereal rise, or fall or stay the same? Explain your answer carefully.

b) What is the proper way to illustrate the effect of the government's ethanol requirement on the corn-based cereal market? (Does the demand curve shift up/right, or does the demand curve shift down/left, or does the supply curve shift up/left, or does the supply curve shift down/right?

greyraccoon805

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.

ECO101H1 Lecture Notes - Lecture 3: Inferior Good, Market Price, Dysgeusia

ECO101H1 Full Course Notes

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