2015-08-13
596
99. Which of the following are the words most commonly used by economists?
a. supply and demand
b. entrepreneurial ability
c. scarcity and human wants
d. prices and exchange
ANSWER: a. supply and demand
100. In a free market, who determines how much of a good will be sold and the price at which it is sold?
a. suppliers
b. demanders
c. the government
d. both suppliers and demanders
ANSWER: d. both suppliers and demanders
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y
101. A market is
a. a place where only buyers come together.
b. a place where only sellers meet.
c. a group of demanders and suppliers of a particular good or service.
d. a group of people with common desires.
ANSWER: c. a group of demanders and suppliers of a particular good or service.
102. A competitive market is
a. a market in which there are many buyers and many sellers so that each has a negligible impact on price.
b. a market where consumers cannot freely interact with sellers.
c. a market where suppliers are under no government restrictions.
d. a market with many buyers but few sellers.
ANSWER: a. a market in which there are many buyers and many sellers so that each has a negligible impact on price.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
103. Generally, the market for ice cream would be considered
a. a monopolistic market.
b. a competitive market.
c. more organized than an auction.
d. a market where individual sellers have significant pricing power.
ANSWER: b. a competitive market.
104. If buyers and/or sellers are price takers, then individually
a. they can somewhat influence the market price.
b. they have ultimate control over market price.
c. buyers will be able to find prices lower than those determined in the market.
d. they have no influence on market price because there are so many in the market.
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ANSWER: d. they have no influence on market price because there are so many in the market.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
105. There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. The market for wheat would be considered
a. perfectly competitive.
b. monopolistic.
c. oligopolistic.
d. monopolistically competitive.
ANSWER: a. perfectly competitive.
106. A monopoly is
a. a market with few sellers.
b. a market with one seller.
c. a market with one buyer.
d. a market where the government sets the price.
ANSWER: b. a market with one seller.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
107. Which of the following would be an example of a monopoly?
a. a local cable television company
b. local cement companies
c. a bakery in a large city
d. a potato farmer
ANSWER: a. a local cable television company
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
108. A market with only a few sellers would be
a. a monopoly.
b. a competitive market.
c. an oligopoly.
d. a monopolistically competitive market.
ANSWER: c. an oligopoly.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
109. Which of the following would be an example of an oligopolistic market?
a. a domestic wheat market
b. air travel
c. the software industry
d. electrical power for residential consumers
ANSWER: b. air travel
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
110. A market with many sellers offering similar but slightly different products is called
a. a monopoly.
b. oligopolistic.
c. monopolistically competitive.
d. perfectly competitive.
ANSWER: c. monopolistically competitive.
111. If a good is “normal,” then an increase in income will result in
a. no change in the demand for the good.
b. a decrease in the demand for the good.
c. an increase in the demand for the good.
d. a lower market price.
ANSWER: c. an increase in the demand for the good.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 2 RANDOM: Y
112. If the price of a substitute to good X increases, then
a. the demand for good X will increase.
b. the market price of good X will decrease.
c. the demand for good X will decrease.
d. the demand for good X will not change.
ANSWER: a. the demand for good X will increase.
113. Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?
a. It would decrease.
b. It would increase.
c. It would be unaffected.
d. There is insufficient information given to answer the question.
ANSWER: a. It would decrease.
114. If a decrease in income increases the demand for a good, then
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a. the good is a substitute good.
b. the good is a complement good.
c. the good is a normal good.
d. the good is an inferior good.
ANSWER: d. the good is an inferior good.
115. Which of the following is a determinant of demand?
a. the price of a substitute good
b. the price of a complement good
c. the price of the good next month
d. all of the above
ANSWER: d. all of the above
116. Ceteris paribus is a Latin phrase that literally means
a. “other things being equal.”
b. “after this therefore because of this.”
c. “to respond slowly to a change in price.”
d. “There’s no such thing as a free lunch.”
ANSWER: a. “other things being equal.”
117. Suppose that John receives a pay increase. We would expect
a. John’s demand for normal goods to remain unchanged.
b. John’s demand for inferior goods to decrease.
c. John’s demand for luxury goods to decrease.
d. John’s demand for normal goods to decrease.
ANSWER: b. John’s demand for inferior goods to decrease.
118. What is the law of demand?
a. When the price of a good or service rises, buyers respond by purchasing more.
b. When income levels increase, buyers respond by purchasing more.
c. When buyers tastes for the good increase, they purchase more of the good.
d. When the price of a good falls, buyers respond by purchasing more.
ANSWER: d. When the price of a good falls, buyers respond by purchasing more.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 2 RANDOM: Y
119. The side of the market that deals with the willingness and ability to produce and sell is
a. demand.
b. competition.
c. supply.
d. a monopoly.
ANSWER: c. supply.
120. The relationship between price and quantity supplied is
a. positive, or direct.
b. negative, or inverse.
c. nonexistent.
d. the same as the relationship between price and quantity demanded.
ANSWER: a. positive, or direct.
121. Suppose you make jewelry. If the price of gold falls, we would expect
a. you to be willing and able to produce more jewelry than before at each possible price.
b. you to be willing and able to produce less jewelry than before at each possible price.
c. you will face a greater demand for your jewelry.
d. you will face a weaker demand for your jewelry.
ANSWER: a. you to be willing and able to produce more jewelry than before at each possible price.
122. A technological advancement
a. will shift the demand curve to the right.
b. will shift the demand curve to the left.
c. will shift the supply curve to the right.
d. will shift the supply curve to the left.
ANSWER: c. will shift the supply curve to the right.
123. The unique point at which the supply and demand curves intersect is called
a. market unity.
b. equilibrium.
c. cohesion.
d. an agreement.
ANSWER: b. equilibrium.
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
124. The price where quantity supplied equals quantity demanded is called
a. the equilibrium price.
b. the monopoly price.
c. the coordinating price.
d. All of the above are correct.
ANSWER: a. the equilibrium price.
PRICE QUANTITY DEMANDED QUANTITY SUPPLIED
$10 10 100
$8 20 80
$6 30 60
$4 40 40
$2 50 20
125. In the table shown, the equilibrium price and quantity would be
a. $2, 50.
b. $4, 40.
c. $8, 80.
d. $10, 100.
ANSWER: b. $4, 40.
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
126. In the table shown, if the price were $8,
a. a surplus of 30 units would exist and price would tend to fall.
b. a surplus of 60 units would exist and price would tend to rise.
c. a surplus of 60 units would exist and price would tend to fall.
d. a shortage of 30 units would exist and price would tend to rise.
ANSWER: c. a surplus of 60 units would exist and price would tend to fall.
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
127. In the table shown, if the price were $2,
a. a shortage of 30 units would exist and price would tend to fall.
b. a surplus of 60 units would exist and price would tend to rise.
c. a surplus of 60 units would exist and price would tend to fall.
d. a shortage of 30 units would exist and price would tend to rise.
ANSWER: d. a shortage of 30 units would exist and price would tend to rise.
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
128. A shift in the supply curve is called
a. a “change in supply.”
b. a “movement along the supply curve.”
c. a “change in the quantity supplied.”
d. All of the above are correct.
ANSWER: a. a “change in supply.”
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
129. A shift in the demand curve is called
a. a “change in demand.”
b. a “movement along the demand curve.”
c. a “change in the quantity demanded.”
d. All of the above are correct.
ANSWER: a. a “change in demand.”
TYPE: M KEY1: D SECTION: 4 OBJECTIVE: 4 RANDOM: Y
130. If there is a shortage of farm laborers, we would expect
a. the wages of farm laborers to decrease.
b. the wages of farm laborers to increase.
c. the prices of farm commodities to decrease.
d. a decrease in the demand for substitutes of farm labor.
ANSWER: b. the wages of farm laborers to increase.
