AP Micro Unit 2

Front

Consumers will buy more of a good when its price is lower and less when its price is higher.

Back

Law of Demand

Front

Producers offer more of a good or service as its prices increases and less as its price falls.

Back

Law of Supply

Front

The point at which the quantity demanded for a product or service is equal to the quantity supplied of that product or service.

Back

Equilibrium

Front

A minimum price consumers are required to pay for a good or service.

Back

Price Floor

Front

A maximum price consumers are required to pay for a good or service.

Back

Price Ceiling

Front

If hot dogs are an inferior good, an increase in income will result in:

Back

a decrease in the demand for hot dogs

Front

If the price of coal increases and the quantity sold increases, which of the following is consistent with these observations?
- The price of oil, a substitute for coal, increased
- A wage increase was given to coal miners
- New machinery made coal mining more efficient
- Consumers' incomes fell
- The demand curve is inelastic

Back

The price of oil, a substitute for coal, increased

Front

Which one of the following statements best reflects the law of diminishing marginal utility? Options: "I have to have a scoop of ice cream on my pie", "I'll never get tired of your cooking", "The last bite tastes just as good as the first", "I couldn't eat another doughnut if you paid me", "I prefer to eat several small meals a day, rather than three large ones"

Back

"I couldn't eat another doughnut if you paid me"

Front

If the cost of producing automobiles increases, how will the price, equilibrium quantity, and consumer surplus change?

Back

Price increases, quantity decreases, and consumer surplus decreases.

Front

During the 1990s, the price of VCRs fell by about 30 percent, and quantity sold decreased by the same amount. The demand for VCRs must:

Back

have shifted to the left