Exam 3: Demand, Supply, and the Market Process

Assume that supply decreases greatly and demand decreases slightly. Which of the following will happen?

An increase in the price of a good would

Figure 3-20 Refer to Figure 3-20. At the equilibrium price, consumer surplus is

Profit can be defined as the

According to the law of supply,

Which of the following is true of profits and losses?

An agricultural economist reports that corn prices are very high this year and that corn growers are earning substantial profits. He concludes that government action is needed to direct more farmers to grow corn. Is such action necessary? Why or why not?

When economists say the supply of a product has increased, they mean the

If salsa and nacho chips are complements, an increase in the price of nacho chips would

If a large percentage increase in the price of a good results in a small percentage increase in the quantity supplied of the good, supply is said to be

When property rights are well defined and markets are competitive, the

Consumer surplus is the area on the graph

Figure 3-20 Refer to Figure 3-20. If 110 units of the good are being bought and sold, then

When economists say the quantity demanded of a product has increased, they mean the

Which of the following would increase the supply of laptop computers?

For a typical product, an increase in consumer income will cause the market demand for the product to

When the quantity demanded and quantity supplied in a market are equal, the market is said to be in

If air travel and bus travel are substitutes,

Which of the following are true?