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| 1 | |
If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium: |
| | A) | price must rise |
| | B) | price must fall |
| | C) | quantity must rise |
| | D) | quantity must fall |
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| 2 | |
Refer to the following:
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S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market: |
| | A) | both supply and demand have decreased and equilibrium price has increased |
| | B) | demand has increased, supply has decreased, and equilibrium price has decreased |
| | C) | both demand and supply have increased and equilibrium price has decreased |
| | D) | demand has decreased, supply has increased and equilibrium price has decreased |
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| 3 | |
When an economist says that the demand for a product has increased, this means that: |
| | A) | quantity demanded is greater at each possible price |
| | B) | firms make less of the product available for sale |
| | C) | consumers respond to a lower price by buying more |
| | D) | the demand curve becomes steeper |
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| 4 | |
Which of the following best describes an inferior good? |
| | A) | A good for which price and quantity demanded are directly related |
| | B) | A good for which price and quantity demanded are inversely related |
| | C) | A good for which income and quantity demanded are directly related |
| | D) | A good for which income and quantity demanded are inversely related |
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| 5 | |
A leftward shift in the demand curve for product E might be caused by: |
| | A) | a decrease in income if E is an inferior good |
| | B) | an increase in income if E is a normal good |
| | C) | an increase in the price of a product that is a close substitute for E |
| | D) | an increase in the price of a product that is complementary to E |
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| 6 | |
At the equilibrium price: |
| | A) | there will be a shortage |
| | B) | there will be neither a shortage nor a surplus |
| | C) | there will be a surplus |
| | D) | there are forces that cause the price to change |
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| 7 | |
MP3 players and headphones are substitute goods. |
| | A) | True |
| | B) | False |
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| 8 | |
A market is characterized by: |
| | A) | either downsloping demand or upsloping supply but not both |
| | B) | the exchange of goods and services, but not resources |
| | C) | exchange between buyers and sellers |
| | D) | face-to-face contact between buyers and sellers |
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| 9 | |
A partial explanation for the inverse relationship between price and quantity demanded is that a: |
| | A) | lower price shifts the supply curve to the left |
| | B) | higher price shifts the demand curve to the left |
| | C) | lower price shifts the demand curve to the right |
| | D) | higher price reduces the real incomes of buyers |
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| 10 | |
If consumer incomes increase, the demand for product Y: |
| | A) | will necessarily remain unchanged |
| | B) | will shift to the right if Y is a complementary good |
| | C) | will shift to the right if Y is a normal good |
| | D) | will shift to the right if Y is an inferior good |
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