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Multiple Choice Quiz
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1
Private property rights and decentralized decision making are primary characteristics of which type of economic system?
A)pure command economy
B)pure communist economy
C)pure democratic economy
D)pure market economy
2
The law of demand implies
A)consumers are not responsive to changes in the price of products.
B)consumers will buy more of a product at higher prices, all else equal.
C)consumers will buy less of a product at higher prices, all else equal.
D)sellers will offer more of their product for sale at higher prices, all else equal.
3
A change in the price of a product will result in
A)a shift in the demand curve for the product.
B)a change in demand for the product.
C)a change in quantity demanded for the product.
D)the formation of a new demand curve for the product.
4
Which of the following will cause a change in quantity supplied?
A)a change in the cost of production.
B)a change in price.
C)an increase in the number of sellers in the market.
D)a change in seller expectations.
5
Which of the following would cause the supply curve to shift?
A)a change in price.
B)increases in the cost of production.
C)a shift in the demand curve.
D)an increase in the number of buyers.
6
A shortage in the market indicates that
A)quantity supplied exceeds quantity demanded.
B)price is above equilibrium.
C)price is below equilibrium.
D)inventories will increase.
7
If ice cream and yogurt are substitutes and the price of yogurt increases then the
A)price of ice cream will decrease.
B)supply of ice cream will decrease.
C)demand for ice cream will decrease.
D)demand for ice cream will increase.
8
The equilibrium quantity of gasoline would decrease if
A)the supply of gasoline increases.
B)the demand for gasoline increases.
C)the price of crude oil increases.
D)consumer incomes increase.
9
In the former Soviet Union, resources were allocated based on
A)the market forces of supply and demand.
B)the decisions of private owners of resources.
C)predetermined socially optimal outcomes.
D)the Gosplan
10
Which of the following is true about a command economy?
A)It is more difficult to maximize social well-being than in a market economy.
B)Consumers have fewer choices of goods and services than in a market economy.
C)A command economy is less responsive to the changing environment than a market economy.
D)All of the above.





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