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1 | |
Which of the following shows the relationship between the price of a good and the amount of that good that consumers want at that price? |
| | A) | supply curve |
| | B) | demand curve |
| | C) | supply schedule |
| | D) | production possibilities frontier |
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2 | |
The law of downward-sloping demand states that: |
| | A) | as price increases, quantity demanded increases. |
| | B) | as price decreases, quantity demanded increases. |
| | C) | as price increases, quantity demanded decreases. |
| | D) | as price decreases, demand increases. |
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3 | |
When the price of good X increases and consumers substitute good Y for good X, we call that the: |
| | A) | income effect. |
| | B) | backwards effect. |
| | C) | substitution effect. |
| | D) | demand effect. |
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4 | |
When the price of good X increases and consumers demand less of good X because the increase in price has made them relatively poorer, we call that the: |
| | A) | income effect. |
| | B) | supply effect. |
| | C) | substitution effect. |
| | D) | money multiplier effect. |
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5 | |
If we were to sum the quantity demanded by every consumer in the market at every price and plot those sums versus the price, we would obtain the: |
| | A) | supply curve. |
| | B) | summed demand curve. |
| | C) | market demand curve. |
| | D) | vertical demand curve. |
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6 | |
Which of the following is not a determinant of demand for good X: |
| | A) | average income. |
| | B) | population. |
| | C) | tastes and preferences. |
| | D) | price of good X. |
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7 | |
If less consumers like broccoli, we would expect that: |
| | A) | demand for broccoli would decrease and the demand curve for broccoli would shift to the left. |
| | B) | demand for broccoli would increase and the demand curve for broccoli would shift to the left. |
| | C) | demand for broccoli would decrease and the demand curve for broccoli would shift to the right. |
| | D) | demand for broccoli would increase and the demand curve for broccoli would shift to the right. |
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8 | |
The demand curve will shift when: |
| | A) | the price of the good changes. |
| | B) | the price of the good changes and when the underlying determinants of demand change. |
| | C) | the underlying determinants of demand change. |
| | D) | never. |
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9 | |
Which of the following shows the relationship between the price of a good and the amount of that good that producers are willing to supply? |
| | A) | supply curve |
| | B) | demand curve |
| | C) | supply schedule |
| | D) | production possibilities frontier |
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10 | |
Which of the following factors will cause the supply curve to shift: |
| | A) | Changes in technology. |
| | B) | Changes in input prices. |
| | C) | Changes in the prices of related goods. |
| | D) | Changes in government policies. |
| | E) | All of the above. |
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11 | |
A change in the price of good X will cause: |
| | A) | a shift of the supply curve. |
| | B) | a movement along the supply curve. |
| | C) | both a and b. |
| | D) | neither a nor b. |
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12 | |
The market-clearing price is also called the ___________ and is the price at which: |
| | A) | prevailing price; the supply and demand curve cross. |
| | B) | prevailing price; the supply curve crosses the y-axis. |
| | C) | equilibrium price; the supply and demand curve cross. |
| | D) | special price; the supply and demand curve cross. |
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13 | |
The equilibrium price and quantity are that price and quantity at which: |
| | A) | the quantity demanded by consumers and the quantity supplied by producers is equal. |
| | B) | the supply and demand curves cross. |
| | C) | both a and b. |
| | D) | neither a nor b. |
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14 | |
Other things held equal, if demand increases, equilibrium price will __________ and equilibrium quantity will __________. However, if supply increases, equilibrium price will _________ and equilibrium quantity will __________, other things held equal. |
| | A) | decrease; decrease; increase; increase |
| | B) | increase; increase; decrease; increase |
| | C) | decrease; decrease; increase; decrease |
| | D) | increase; increase; decrease; decrease |
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15 | |
The forces of demand and supply determine: |
| | A) | What is produced. |
| | B) | For whom the goods are produced. |
| | C) | How the goods are produced. |
| | D) | All of the above. |
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