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1 | |
Statement I. The forces of demand and supply are central to the workings of a market economy.
Statement II. The earnings of people like Oprah Winfrey, Jay Leno. Eddie Murphy and Julia Roberts have very little to do with the forces of supply and demand. |
| | A) | Statement I is true and statement II is false. |
| | B) | Statement II is true and statement I is false. |
| | C) | Both statements are true. |
| | D) | Both statements are false. |
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2 | |
When the price of a good is raised, |
| | A) | supply goes up. |
| | B) | demand goes down. |
| | C) | supply goes up and demand goes down. |
| | D) | supply does not go up and demand does not go down. |
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3 | |
Statement I. A market for a good or service must have a specific location. Statement II. A market
can exist solely in cyberspace. |
| | A) | Statement I is true and statement II is false. |
| | B) | Statement II is true and statement I is false. |
| | C) | Both statements are true. |
| | D) | Both statements are false. |
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4 | |
An increase in demand takes place when there is an increase in quantity demanded at |
| | A) | at least one price. |
| | B) | at least a few prices. |
| | C) | at all prices. |
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5 | |
A decrease in supply results in a |
| | A) | lower equilibrium price and quantity. |
| | B) | higher equilibrium price and quantity. |
| | C) | higher equilibrium price and lower equilibrium quantity. |
| | D) | lower equilibrium price and higher equilibrium quantity. |
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6 | |
As your income rises your demand for inferior goods |
| | A) | declines. |
| | B) | rises. |
| | C) | stays the same. |
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7 | |
As the price of a good declines, the prices of substitute goods will _____ and the prices of
complementary goods will ______. |
| | A) | rise, rise |
| | B) | fall, fall |
| | C) | rise, fall |
| | D) | fall, rise |
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8 | |
Each of the following is an influence on supply except |
| | A) | the cost of production. |
| | B) | technological advance. |
| | C) | taxes. |
| | D) | Changes in the price of that good. |
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9 | |
If we go from point R on a supply curve to point S on that same curve, there has been |
| | A) | a change in supply. |
| | B) | a change in the quantity supplied. |
| | C) | an increase in supply. |
| | D) | a decrease in supply. |
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10 | |
A technological advance will |
| | A) | increase supply. |
| | B) | decrease supply. |
| | C) | have no effect on supply. |
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11 | |
At equilibrium price, quantity demanded and quantity supplied are |
| | A) | always equal. |
| | B) | usually equal. |
| | C) | sometimes equal. |
| | D) | never equal. |
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12 | |
If quantity demanded is 40 and quantity supplied is 30, price will |
| | A) | rise. |
| | B) | fall. |
| | C) | stay the same. |
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13 | |
If market price is above equilibrium price, quantity demanded is |
| | A) | greater than quantity supplied. |
| | B) | equal to quantity supplied. |
| | C) | less than quantity supplied. |
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14 | |
The market demand for most goods will |
| | A) | increase if the prices of substitutes rise. |
| | B) | decrease if the prices of substitutes rise. |
| | C) | stay the same if the prices of substitutes rise. |
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15 | |
Rice, potatoes, and spaghetti are |
| | A) | inferior goods. |
| | B) | normal goods. |
| | C) | luxury goods. |
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2002 McGraw-Hill Higher Education