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Ch 3 Individual Markets: Demand And Supply

10 Questions
Ch 3 Individual Markets: Demand And Supply

Review for ch 3 McConnell and Brue 15 ed.

Questions and Answers
  • 1. 
    A market is any arrangement that brings together the buyers and sellers of a particular good or service.
    • A. 

      True

    • B. 

      False

  • 2. 
    • A. 

      True

    • B. 

      False

  • 3. 
    The law of demand states that as price increases, other thing being equal, the quantity of the product demanded increases.
    • A. 

      True

    • B. 

      False

  • 4. 
    The law of diminishing marginal utility is one explanation of why there is an incerse relationship between price and quantity demanded.
    • A. 

      True

    • B. 

      False

  • 5. 
    The substitution effect suggests that, at a lower price, you have the incentive to substitute the more expensive product for similar products which are relatively less expensive.
    • A. 

      True

    • B. 

      False

  • 6. 
    The is no difference between individual demand schedules and the market demand schedules.
    • A. 

      True

    • B. 

      False

  • 7. 
    In graphing supply and demand schedules, supply is put on the horizontal axis and demand on the vertical axis.
    • A. 

      True

    • B. 

      False

  • 8. 
    • A. 

      True

    • B. 

      False

  • 9. 
    If consumer tastes or preferences for a product decrease, the demand for the product will tend to decrease.
    • A. 

      True

    • B. 

      False

  • 10. 
    An increase in income will tend to increase the demand for a product.
    • A. 

      True

    • B. 

      False