Questions and Answers
Which factor describes the change in quantity demanded due to a change in price?
Excess demand
What happens when both supply and demand move in the same direction?
Predictions about quantity can be made but not about price
Which principle explains the tendency of individual and market supply curves to be upward-sloping?
Low-hanging-fruit principle
What type of goods see an increase in demand as income increases?
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What happens to the market supply curve if both individual supply curves are upward-sloping?
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What occurs as producers expand production according to the text?
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What assumption is made about the firms selling goods in perfectly competitive markets?
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What characteristic defines firms in perfectly competitive markets?
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What is considered when determining the socially optimal amount of doing something?
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What concept is applied when there are benefits but also costs to taking action?
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