Chapter 3 Review Quiz - January 2025

What is the definition of supply in economics?

• The amount of money a consumer is willing to spend.

• The amount of some good or service a producer is willing to supply at each price.

• The amount of goods a consumer demands at each price.

• The amount of goods a producer demands at each price.

What is the effect on gasoline producers when the price is below the equilibrium price?

• Increases incentives to produce

• Reduces incentives to produce

• No effect on incentives

• Increases production

What happens in a market when the actual price is below equilibrium price?

• Excess supply

• Excess demand

• Price stability

• No change in demand

What does the term "excess demand" imply?

• Supply exceeds demand

• Demand exceeds supply

• Demand and supply are equal

• Price is above equilibrium

What does "ceteris paribus" mean in Latin?

• All things considered

• Other things being equal

• Change is constant

• Nothing changes

How does a decrease in the price of a Honda affect demand for a Ford?

• It has no effect

• It increases demand for a Ford

• It decreases demand for a Ford

• It stabilizes demand for a Ford

What is the effect of an increase in income on demand?

• No effect

• Decreases demand

• Increases demand

• Stabilizes demand

In economics, what is a normal good?

• A product whose demand rises when income rises.

• A product whose demand falls when income rises.

• A product whose demand remains constant regardless of income.

• A product that is only purchased by wealthy individuals.

What is a substitute good?

• A good used together with another

• A good used in place of another

• A good that is always in demand

• A good that has no alternatives

This part of the market determines SUPPLY

• buyers
• sellers
• consumers
• us