Ch 3 Individual Markets: Demand And Supply
25 Questions
| Attempts: 1566
For every demand there must be a supply and if the demand for a product or service exceeds the supply there is a gap in the market. The quiz below is a study test for the Ch. 3 McConnell and Brue 15 ed on individual markets. Take it up and see how well you understood the chapter.
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.Demand is the amount of a good or service that a buyer will purchase at a particular price.
- 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.If price falls, there will be an increase in demand.
- 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
- 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.
- A.
True
- B.
False
- 12.If two goods are complementary, an increase in the price of one will tend to increase the demand for the other.
- A.
True
- B.
False
- 13.A change in the quantity demanded means that there has been a change in demand.
- A.
True
- B.
False
- 14.Supply is a schedule that shows the amounts of a product a producer can make in a limited amount of time.
- A.
True
- B.
False
- 15.An increase in resource prices will tend to decrease supply.
- A.
True
- B.
False
- 16.A government subsidy for the production of a product will tend to decrease supply.
- A.
True
- B.
False
- 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.
- A.
True
- B.
False
- 18.A change in supply means that there is a movement along an existing supply curve.
- A.
True
- B.
False
- 19.A surplus indicates that the quantity demanded is less that the quantity supplied.
- A.
True
- B.
False
- 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.
- A.
True
- B.
False
- 21.The equilibrium price of a good is the price at which the demand and the supply of the good are equal.
- A.
True
- B.
False
- 22.The rationing function of prices is the elimination of shortages and surpluses.
- A.
True
- B.
False
- 23.If the supply of a product increases and the demand decreases, the equilibrium price and quantity will increase.
- A.
True
- B.
False
- 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.
- A.
True
- B.
False
- 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.
- A.
True
- B.
False
Related Topics
Recent Quizzes
Featured Quizzes
Popular Topics
Back to top