BACN115 Revision2

_____________indicates that consumers often get more value from a good than is represented by the price.

• Consumer surplus

• Market Shortage

A simultaneous increase in both demand and supply will definitely cause a decrease in the equilibrium price of bananas.

• False

• True

Rent control is the most effective strategy to solve the housing crisis.

• False

• True

When the quantity demanded of a good or service is greater than the quantity supplied, there is ____________at that particular price.

• Excess Demand

• Excess supply

A cost to society created by market inefficiency.

• Welfare costs

• Deadweight loss

Other things being equal (i.e. ceteris paribus), the higher the price of a good, the lower is the quantity demanded, and vice versa.

• The Law of Supply

• The Law of demand

The price of sausages (complement of bacon in consumption) increases. This causes the equilibrium price to __________ and the equilibrium quantity to __________ in the market for bacon, ceteris paribus.

• decrease; decrease

• increase; increase

In the market for first-year economics textbooks, assuming everything else remains unchanged, the equilibrium price of textbooks will increase if_____.

• the supply of textbooks increases.

• the cost of the publication of textbooks increases.

Which of the following will cause an increase in the demand for beef in Pretoria?

• Tim Noakes, an influential South African scientist, recently claimed that people should eat more fatty meat and less sugar.

• Due to unfavourable economic growth, many Pretorians lost their jobs and therefore their income decreases.

The result of a change in any of the determinants of demand other than price.

• Change in demand

• Change in quantity demanded

• Change in Price