Macro Chapter 4 True or False

A perfectly competitive market consists of products that are all slightly different from one another

False

An increase in the price of steel will shift the supply of automobiles to the right

False

I there is an increase in supply accompanied by a decrease in demand for coffee, then there will be a decrease in both the equilibrium price and the quantity in the market for coffee

False

If apples and oranges are substitutes, an increase in the price of apples will decrease the demand for oranges

False

If there is a shortage of a good, then the price of that good tends to fall

False

The law of demand states that an increase in the price of a good decreases the demand for that good

False

When the price of a good is below the equilibrium price, it causes a surplus

False

A monopolistic market only has one seller

True

An advance in the technology employed to manufacture Roller blades will result in a decrease in the equilibrium price and an increase in the equilibrium quantity in the market for Roller blades

True

I golf clubs and golf balls are complements, an increase in the price of golf clubs will decrease the demand for golf balls

True

If Coca-Cola and Pepsi are substitutes, an increase in the price of Coca-Cola will cause an increase in the equilibrium price and quantity in the market for Pepsi

True

If consumers expect the prices of shoes to rise, there will be an increase in demand for shoes today

True

If pencils and paper are complements, an increase in the price of pencils causes the demand for paper to decrease and shift to the left

True

The law of supply states that an increase in the price of a good increases the quantity supplied of that good

True

The market supply curve is the horizontal summation of the individual supply curves

True