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In a market economy, a high price is a signal for producers to offer less and consumers to buy more (tf)
In a market economy, a low price is a signal for producers to supply more and consumers to buy less (tf)
If the demand is unchanged and supply increases, the new equilibrium price will be higher than the old one (tf)
If the cost of building materials increases, the supply curve for new homes is likely to shift to the right (tf)
The point where the supply curve and the demand curve intersect is called market equilibrium (tf)
If a market is at equilibrium, and there is a sudden increase in demand, then
a temporary shortage will occur and the price will rise.
Relatively small changes in supply (both increases and decreases) will have the smallest impact on price when
demand is elastic
Relatively small changes in supply (both increases and decreases) will have the greatest impact on prices
demand is inelastic
What happens when wages are set above the equilibrium level by law?
Firms employ fewer workers than they would at the equilibrium wage
On which kinds of goods do governments generally place price ceilings?
those that are essential but too expensive for some consumers
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?
Which of the following is an example of a good whose price goes down because of improvements in technology?
What happens when the supply of a nonperishable good is greater than the consumer wants to buy?
the good becomes a luxury and the price rises
Which of the following is a situation that makes the market behave inefficiently?
when consumers do not have enough information to make good choices
What happens to a market in equilibrium when there is an increase in supply?
Quantity supplied will exceed quantity demanded, so the price will drop
What is the name of the smallest amount that can legally be paid to most workers for an hour of work?
The price ceiling that was used to control the price of housing in New York City and other cities was called which of the following?
The price of a slice of pizza is $2.50. At the end of the day, how many unsold slices of pizza will be left, according to Figure 6.2?
If the government set a price of $2.00 a slice, how many slices of pizza will be sold each day, according to Figure 6.2?
costs of production that affect people who have no control over how much of a good is produced
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