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| 1 | |
When we know the quantity of a product that buyers wish to purchase at each possible price, we know: |
| | A) | demand |
| | B) | supply |
| | C) | excess demand |
| | D) | excess supply |
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| 2 | |
Supply is the quantity of a good sellers wish to sell each time the market opens. |
| | A) | True |
| | B) | False |
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| 3 | |
Supply is the ________ of a good sellers wish to sell at each possible _____. |
| | A) | price, quantity |
| | B) | cost, demand |
| | C) | quantity, price |
| | D) | cost, price |
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| 4 | |
The equilibrium price clears the market; it is the price at which: |
| | A) | Everything is sold. |
| | B) | Buyers spend all their money. |
| | C) | Quantity demanded equals quantity supplied. |
| | D) | Excess demand is zero. |
| | E) | c and d. |
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| 5 | |
Excess supply exists when the quantity supplied exceeds the quantity demanded at the ruling price. |
| | A) | True |
| | B) | False |
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| 6 | |
The demand curve shows the relation between _____ and ________, holding other things constant. |
| | A) | income, quantity |
| | B) | tastes, quantity |
| | C) | income, tastes |
| | D) | price, quantity |
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| 7 | |
When a market is in equilibrium: |
| | A) | Quantity demanded equals quantity supplied. |
| | B) | Excess demand and excess supply are zero. |
| | C) | The market is cleared by the equilibrium price. |
| | D) | All of the above |
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| 8 | |
________ and ________ do not directly affect the demand curve. |
| | A) | the price of related goods, consumer incomes |
| | B) | consumer incomes, tastes |
| | C) | the costs of production, bank opening hours |
| | D) | the price of related goods, preferences |
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| 9 | |
A change in price can cause a shift of a demand curve. |
| | A) | True |
| | B) | False |
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| 10 | |
A demand curve can shift only because of changing: |
| | A) | incomes |
| | B) | prices of related goods |
| | C) | tastes |
| | D) | all of the above |
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| 11 | |
A supply curve is only directly affected by: |
| | A) | technology |
| | B) | input costs |
| | C) | government regulation |
| | D) | all of the above |
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| 12 | |
An increase in price will cause a supply curve to shift to the left. |
| | A) | True |
| | B) | False |
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| 13 | |
If a price increase of good A increases the quantity demanded of good B, then good B is a: |
| | A) | substitute good |
| | B) | complementary good |
| | C) | bargain |
| | D) | inferior good |
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| 14 | |
An increase in consumer income will increase demand for a _______ but decrease demand for a _________. |
| | A) | substitute good, inferior good |
| | B) | normal good, inferior good |
| | C) | inferior good, normal good |
| | D) | normal good, complementary good |
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| 15 | |
Normally, 'holidays abroad' can be regarded as a: |
| | A) | inferior good |
| | B) | substitute good |
| | C) | normal good |
| | D) | complimentary good |
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| 16 | |
Supermarket low price own-brands can normally be regarded as inferior goods. |
| | A) | True |
| | B) | False |
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| 17 | |
______ can be regarded as a substitute for _________. |
| | A) | milk, sugar |
| | B) | butter, margarine |
| | C) | cars, petrol |
| | D) | pipes, tobacco |
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| 18 | |
Price controls are government rules or laws that forbid: |
| | A) | the adjustment of prices to clear markets. |
| | B) | the adjustment of demand to clear markets. |
| | C) | the adjustment of supply to clear markets. |
| | D) | the existence of markets. |
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| 19 | |
A floor price that is set above the equilibrium market clearing price will lead to: |
| | A) | excess demand |
| | B) | excess supply |
| | C) | shortages |
| | D) | no change |
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| 20 | |
Price ceilings are imposed to increase the price above the free market equilibrium price. |
| | A) | True |
| | B) | False |
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