Chapter 3 Test Questions

Consumers: a. Receive goods and services from the product market b. Receive dollars from the product market c. Provide dollars to the factor market d. Receive factors of production from the factor market.

A

Jon's demand schedule for donuts indicates: a. His opportunity cost of buying donuts b. Why he likes donuts c. How many he will actually buy d. Where he buys them

A

Suppose the equilibrium price for a laptop decreases and the equilibrium quantity increases. We can conclude there has been: a. An increase in the supply of laptops b. A decrease in the supply of laptops c. A decrease in the demand for laptops d. An increase in demand for laptops.

A

To calculate market supply we: a. Add quantities supplied for each individual supply schedule b. Find the average quantity supplied at each price. c. Find the difference between quantity supplied and quantity demanded at each price d. Find the demand for each point on the demand curve

A

A rightward shift in the demand curve and a rightward shift in a supply curve both result in a: a. Lower EQ quantity b. Higher EQ quantity c. Lower EQ price d. Higher EQ price

B

In the market for web design services, an increase in teh number of people with web designing skills will cause: a. An increase in EQ price and a decrease in EQ quantity. b. A decrease in the EQ price and an increase in the EQ quantity. c. An increase in the equilibrium price and an increase in the EQ quantity. d. A decrease in the EQ price and a decrease in the EQ quantity.

B

If the number of consumers in a market decreases, this will cause: a. An increase in EQ price and a decrease in the EQ quantity b. A decrease in the EQ price and an increase in the EQ quantity c. An increase in the EQ price and an increase in the EQ quantity d. A decrease in the EQ price and a decrease in the EQ quantity

D

In a market economy, the people who receive the goods and services produced are the people who: a. Need the goods and services b. Want the goods and services c. Have the most political power d. Are willing and able to pay the market price

D

The quantity of a good that a consumer is willing to buy depends on: a. the price b. consumer's income c. the opportunity cost d. all of the above

D

Which of the following explains why economic interaction occurs? a. Limited ability to produce what we need b. Constraints on time, energy, and resources. c. The gains made by specialization d. All of the above

D

Due to the movement of healthy eating and the high fat content of McDonald's food, people stop eating at McDonald's. Which curve shifts and which way?

Demand curve, to the left

(T or F) A change in the determinants of demand causes a movement along the demand curve.

F

(T or F) The demand curve shows how much of a good a buyer will actually buy at a given price.

F

Samsung has lost a court case to Apple. This has cost Samsung the ability to produce their phone and tablets that infringe on Apple's patents. Which curve shifts and which way does it shift?

Supply curve, to the left

Three brand new car companies are created. Which curve moves and which direction?

Supply curve, to the right

(T or F) A decrease in the price of one good can cause the demand for another good to increase in the goods are complimentary

T

(T or F) Because the number of sellers is a determinant of supply, when the number of sellers in a market changes, the supply curve also changes

T

(T or F) Equilibrium price is determined by buyers and sellers interacting with each other to try to get the best deal for themselves.

T

(T or F) The supply curve reflects the potential behavior of the sellers or producers of a good or service, not the buyers.

T

There has been an increase in income in a community with a defense contract, which way does the curve shift and which curve shifts?

To the right, demand curve

In the market, the EQ price is determined by

demand and supply

The law of demand states that as price rises:

demand decreases

According to the law of supply, as price falls:

supply decreases