Ch 3 Individual Markets: Demand and Supply
10 Questions I 507 Attempts I Created By ecofanics 1380 days agoReview for ch 3 McConnell and Brue 15 ed.
Question Excerpt From Ch 3 Individual Markets: Demand and Supply
| Q.1) | A market is any arrangement that brings together the buyers and sellers of a particular good or service. |
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| Q.2) | Demand is the amount of a good or service that a buyer will purchase at a particular price. |
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| Q.3) | The law of demand states that as price increases, other thing being equal, the quantity of the product demanded increases. |
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| Q.4) | The law of diminishing marginal utility is one explanation of why there is an incerse relationship between price and quantity demanded. |
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| Q.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. |
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| Q.6) | The is no difference between individual demand schedules and the market demand schedules. |
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| Q.7) | In graphing supply and demand schedules, supply is put on the horizontal axis and demand on the vertical axis. |
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| Q.8) | If price falls, there will be an increase in demand. |
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| Q.9) | If consumer tastes or preferences for a product decrease, the demand for the product will tend to decrease. |
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| Q.10) | An increase in income will tend to increase the demand for a product. |
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| Q.11) | When two products are substitute goods, the price of one and the demand for the other will tend to move in the same direction. |
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| Q.12) | If two goods are complementary, an increase in the price of one will tend to increase the demand for the other. |
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| Q.13) | A change in the quantity demanded means that there has been a change in demand. |
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| Q.14) | supply is a schedule that shows the amounts of a product a producer can make in a limited amount of time. |
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| Q.15) | An increase in resource prices will tend to decrease supply. |
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| Q.16) | A government subsidy for the production of a product will tend to decrease supply. |
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| Q.17) | An increase in the prices of other goods that could be made by the producers will tend to decrease the supply of the current good that the producer is making. |
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| Q.18) | A change in supply means that there is a movement along an existing supply curve. |
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| Q.19) | A surplus indicates that the quantity demanded is less that the quantity supplied. |
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| Q.20) | If the market price of a product is below its equilibrium price, the market price will will tend to rise because demand will decrease and supply will increase. |
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| Q.21) | The equilibrium price of a good is the price at which the demand and the supply of the good are equal. |
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| Q.22) | The rationing function of prices is the elimination of shortages and surpluses. |
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| Q.23) | If the supply of a product increases and the demand decreases, the equilibrium price and quantity will increase. |
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| Q.24) | If the demand for a product increases and the supply of the product decreases, the equilibrium price will increase and the equilibrium quantity will be indeterminant. |
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| Q.25) | Economists often make the assumption of other things equal to hold constant the effects of other factors when examining the relationship between prices and quantities demanded and supplied. |
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