PRACTICE FOR CHAPTER 4 OCT 25,2013. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Transcription

1 PRTIE FOR HPTER 4 OT 25,2013 MULTIPLE HOIE. hoose the one alternative that best completes the statement or answers the question. 1) market is defined as 1) ) a place where one good is bartered for another. ) any arrangement that brings buyers and sellers together. ) a physical place where people buy both goods and services. D) a store where people buy physical goods. E) a physical place where people buy only goods. 2) Which of the following statements is true about a competitive market? competitive market 2) ) has one seller competing to sell his or her product. ) includes markets for goods and services but not for inputs. ) has so many buyers and sellers that no one can influence the price. D) must have a physical location. E) has a handful of sellers but always has many buyers. 3) Gasoline prices increase by 50 percent and other things remain the same. s a result, there is 3) ) a decrease in the demand for gasoline. ) a decrease in the quantity of gasoline demanded. ) no change in the quantity of gasoline demanded. D) an increase in the demand for gasoline. E) More information is needed to determine if the demand for gasoline increases or decreases. 4) Demand curves slope because as the price increases and other things remain the same, the quantity demanded. ) downward; decreases ) upward; decreases ) upward; increases D) downward; increases E) downward; does not change 5) onsumers regard Dell computers and pple computers as substitutes. If the price of a Dell computer decreases, the ) demand for Dell computers decreases. ) demand for pple computers decreases. ) demand for Dell computers increases. D) demand for pple computers increases. E) supply of Dell computers increases. 6) ar insurance and cars are complements. If the price of car insurance increases, the 6) ) demand for cars decreases. ) quantity of cars demanded decreases. ) demand for cars increases. D) quantity of cars demanded increases. E) More information is needed to determine if the demand increases or decreases. 4) 5) 1

2 7) If macaroni and cheese is an inferior good, then a decrease in income results in 7) ) an increase in the demand for macaroni and cheese. ) a decrease in the demand for macaroni and cheese. ) an increase in the supply of macaroni and cheese. D) a decrease in the supply of macaroni and cheese. E) oth answers and D are correct. 8) In the above figure, the movement from point a to point b reflects 8) ) an increase in the price of the tomato sauce used to produce pizza. ) an increase in the number of people who eat pizza. ) an increase in the demand for pizza. D) a decrease in the price of pizza. E) a decrease in the number of firms producing pizza. D 9) In the above figure, the shift in the demand curve from D to D1 can be the result of 9) ) an increase in the price of a sub sandwich, a substitute for pizza. ) a decrease in income if pizza is a normal good. ) an increase in the price of pizza. D) an increase in the price of soda, a complement to pizza. E) a change in quantity demanded. 10) If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are 10) ) a normal good. ) an inferior good. ) a substitute for film cameras. D) made using advanced technology. E) a complement to film cameras. 2

3 11) The law of supply states that, other things remaining the same, 11) ) if the price of a good increases, the quantity supplied increases. ) if the price of a good increases, the supply increases. ) demand increases when supply increases. D) as people's income increase, the supply of goods increases. E) if the price of a good increases, firms buy less of it. 12) It is expected that the price of a bushel of wheat will increase in one month. This belief will result in ) an increase in the current supply of wheat. ) a decrease in the future supply of wheat. ) a decrease in the current supply of wheat. D) no change in the current or future supply of wheat. E) an increase in the current quantity supplied of wheat. 12) 13) In the above figure, an increase in cost of the cheese used to produce pizza 13) ) shifts the supply curve from S to S2. ) results in a movement from point a to point b. ) shifts the supply curve from S to S1. D) has no effect. E) results in a movement from point b to point a. 14) decrease in the price of a complement in production leads to 14) ) an increase in the supply of the good in question. ) no change in the supply of the good in question. ) a decrease in the supply of the good in question. D) a decrease in the quantity supplied of the good in question. E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question. 3

4 15) Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs? ) an increase in the price of the resources used to produce compact discs ) a decrease in the price of a compact disc ) a decrease in the number of suppliers of compact discs D) an increase in the price of a compact disc E) new technology that lowers the cost of producing compact discs D 15) 4

5 nswer Key Testname: UNTITLED1 1) 2) 3) 4) 5) 6) 7) 8) D 9) 10) 11) 12) 13) 14) 15) D 5