Ch 3 Individual Markets: Demand And Supply

25 Questions | Attempts: 1566

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Ch 3 Individual Markets: Demand And Supply - Quiz

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

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