ECN 104 Lecture Notes - Lecture 2: Margarine, Economic Equilibrium, Demand Curve

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15 Oct 2016

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Supply and demand: is a model of how a competitive market behaves. Demand curve, supply curve, set of factors that causes shifts, market equilibrium, the way market equilibrium changes when supply curve or demand curve shifts. Competitive market: market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold. (wheat farmers) Demand schedule: shows how the quantity demanded changes as the price changes. Quantity demanded: the actual amount of a good or service consumers are willing to buy at some specific price. The market demand curve is the horizontal sum of the individual demand curves of all consumers in the market. Law of (downward sloping) demand: the principle that a higher price for a good or service, other things equal, leads people to demand a smaller quantity of that good or service. 5 principle factors that shift the demand curve:

Related Questions

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.

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

17) Suppose a downward-sloping demand curve intersects the horizontal axis at a point where quantity demanded equals 1250 units. What is the "value" that consumers place on the 1250th unit of this good? A) a negative value B) a positive value C) $0 D) $1250 E) it depends on the position of the supply curve The diagram below shows the market for litres of milk. Price Supply Demand Q1 Q0 Quantity FIGURE 5-8

ECN 104 Lecture Notes - Lecture 2: Margarine, Economic Equilibrium, Demand Curve

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