4. An increase in supply is illustrated by a __________ shift in the market supply curve and will occur when _______________

1. Left; firms attempt to increase selling prices in response to a higher price paid for a major input to the production process.
2. Left; firms exit the industry, leaving more business for the remaining firms.
3. Right; input costs fall or an improvement in technology occurs.
4. Right; the price of the product increases.

5. In microeconomics, the market demand curve illustrates

1. A time series representing the price of a good and the quantity that has been purchased at each price.
2. The amount of a good or service purchased at various prices during a particular time period.
3. The relationship between the price of a good and the amount of that good that consumers are willing and able to buy within a certain time period.
4. The relationship between income and the amount of a good that consumers are willing and able to buy.

6. The market demand curve slopes downward because

1. The lower the price, the lower the quantity demanded of a good or service, as consumers’ perceived value falls.
2. The higher the price, the higher the quantity demanded of a good or service, as consumers’ perceived value increases.
3. The lower the price, the higher the quantity demanded, as consumers are willing and able to buy more of a good or service at lower prices.
4. Both a) and b).

7. An increase in demand for a normal good is illustrated by a __________ shift in the market demand curve and will occur when _______________

1. Right; consumer incomes rise.
2. Right; input prices fall.
3. Left; firms raise their prices in response to higher input costs.
4. Left; prices fall for substitute goods.