____ is the difference between the total amount consumers would be willing and able to

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used. _____ 1. The quantity of a product demanded is not equal to the quantity supplieda. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 2. Quantity demanded equals quantity supplied and the market clearsa. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 3. A situation achieved when a firm produces output most desired by consumersa. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 4. A minimum legal price below which a product cannot be solda. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 5. The amount of a product that cannot be sold at a given pricea. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 6. Consumers are more willing and able to buy a product at every pricea. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 7. A maximum legal price above which a product cannot be solda. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 8. A situation achieved when a firm produces output at the lowest possible costa. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____ 9. The amount by which the quantity demanded exceeds the quantity supplied at a particular pricea. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____10. The cost of time and information needed to carry out market exchangea. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms may not be used._____11. Producers are less willing and able to supply a product at every pricea. allocative efficiency b. consumer surplus c. decrease in demand d. decrease in supply e. disequilibrium f. increase in demand g. increase in supply h. market equilibrium i. price ceiling j. price floor k. productive efficiency l. shortage m. surplus n. transaction costs

True or False A price below a products equilibrium price will result in a surplus of the product.

When there is a voluntary exchange, it is reasonable to believe that a. both the buyer and seller gained. b. neither buyer nor seller gained. c. the buyer gained more than the seller. d. the seller gained more than the buyer.

True or False A market is always in a state of equilibrium.

True or False A price ceiling has an impact only if ceiling price is set above its equilibrium level.

Given an upward-sloping supply curve, a rightward shift of the demand curve a. decreases both equilibrium price and quantity. b. increases both equilibrium price and quantity. c. decreases equilibrium price only. d. increases equilibrium price only.

True or False A shift of the supply curve results from a change in quantity demanded at all prices.

A market will stay in equilibrium until a. one of the factors that determines demand changes. b. one of the factors that determines supply changes. c. all the suppliers go out of business. d. both a and b

__?__ are the costs of time and information required to carry out market exchange.

Each of the following will cause the demand for butter to increase except a. an increase in the price of margarine. b. a scientific study that shows butter is good for peoples health. c. an increase in the number of people who are unemployed. d. an increase in the number of people who might purchase butter.

True or False An increase in a firms costs of production will cause the supply curve to shift to the left.

Each of the following will cause supply to increase except a. workers are trained to be more efficient. b. a new, lower-cost source of electric power is found. c. firms invest in new technology that reduce their costs of production. d. a number of experienced workers retire and are replaced by new workers.

True or False If firms costs of production fall while the demand for their product grows, you can be sure the equilibrium price for the product will fall.

There is __?__ when a firm produces products at the lowest possible cost.

Suppose the current equilibrium price for natural gas is $1.05 per thousand cubic feet. The government decides to impose a price ceiling of $.90. This will cause a. the quantity demanded to decrease and the quantity supplied to decrease. b. the quantity demanded to decrease and the quantity supplied to increase. c. the quantity demanded to increase and the quantity supplied to decrease. d. the quantity demanded to increase and the quantity supplied to increase.

__?__ is the difference between the total amount consumers would be willing and able to pay for a product and what they actually had to pay.

Equilibrium On a separate sheet of paper, complete the table below:

Graphing Demand and Supply Construct a graph of the demand and supply for tacos from the data provided in the table in exercise 27.

Graphing Shifts in Demand and Supply On your graph, draw and label the shifts of demand and supply curves for tacos that would result from each of the following events. a. The cost of corn meal increases 50 percent. b. The price of pizza goes down 25 percent. c. The number of people who like tacos increases by 30 percent. d. A new machine is invented that makes tacos automatically.

Sharpen Your Skills: Analyze Supply and Demand Graphs Between 2000 and June of 2003, the unemployment rate in the United States rose from 4.0 percent to 6.4 percent. This 2.4 percent increase added more than 3.6 million workers to the ranks of the unemployed in this country. People who are out of work may receive unemployment compensation payments from the government. These payments, however, replace only a portion of the income they had been earning. After unemployed people pay for food, clothing, and shelter for their families, they often have little left over to purchase other goods or services. Increased unemployment in the United States between 2000 and June of 2003 contributed to a decline in demand for many household appliances. Sketch a graph similar to the one to the right to show what happened to the demand and supply for refrigerators in these years. Place arrows on your graph to show the shifts of demand, the surplus of products, and change in the equilibrium price. Label the changes that took place and explain what happened.

Make Predictions Predict how the equilibrium price of coffee would be affected by the following changes: a. Poor growing conditions for coffee beans (demand remains constant) b. A major advertising campaign in the United States by a group of the worlds coffee growers (supply remains constant) c. The publication of a new medical study warning against coffee consumption in excess of one cup per week (supply remains constant) d. Trade prohibition against a country in South America that produces a significant share of the U.S. coffee supply (demand remains constant)

Access EconNews Online at thomsonedu.com/ school/econxtra. Click on Supply and Demand under Economic Fundamentals. Read the article entitled If the Feds Won't Increase the Minimum Wage, Some States Will. Then draw a graph showing the impact of the imposition of a minimum wage, indicating the presence of unemployment with the price floor.