True/False
Indicate whether the
statement is true or false.
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1.
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Individuals in a market economy can be both buyers and sellers.
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2.
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The law of demand says that in most cases, the lower the price, the lower the
quantity demanded.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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3.
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The demand curve is the graphical counterpart to the
a. | demand schedule. | b. | supply curve. | c. | supply
schedule. | d. | general demand. |
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4.
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A supply schedule illustrates the quantity supplied at
a. | various demand levels. | b. | a single selling price. | c. | different selling
prices. | d. | market equilibrium. |
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5.
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The demand schedule is a description of the behavior of _____ in a
market.
a. | sellers | b. | buyers | c. | a supply
schedule | d. | a demand schedule |
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6.
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Ceteris paribus, when used by economists, means
a. | for every action, there is a reaction. | b. | things never change. | c. | all other things
equal. | d. | buyer beware. |
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7.
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Opportunity cost is defined as the value or benefit of the
a. | most expensive item. | b. | least expensive item. | c. | supply
curve. | d. | next best alternative. |
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8.
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Using the law of demand, what would generally happen if the price of gasoline
were to rise to $7.00 per gallon?
a. | The quantity demanded would increase. | b. | There would be no effect on
demand. | c. | The quantity demanded would decrease. | d. | Automakers would increase
production. |
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9.
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The supply schedule is a description of
a. | the quantity demanded at a single price. | b. | the supply offered
according to demand. | c. | the basis of calculating market
price. | d. | the relationship between quantities supplied and market
prices. |
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10.
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The average sale price of a home in the United States increased from $207,000 to
$297,000 from 2000 to 2005. All else equal, we would expect that during the same time
a. | The quantity of new homes supplied also increased. | b. | The quantity of new
homes supplied decreased. | c. | The quantity of new homes supplied did not
change. | d. | The quantity of new homes supplied changed in proportion to changes in the
population. |
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