Market- Practice Test (Part 1)

Which of the following statements is correct?

Buyers determine demand, and sellers determine supply

In competitive markets, buyers

and sellers are price takers.

A competitive market is one in which there

are so many buyers and so many sellers that each has a negligible impact on the price of the product.

A market includes

both buyers and sellers

In a competitive market, the quantity of a product produced and the price of the product are determined by

both buyers and sellers

Communist countries worked under the premise that

central planners were in the best position to determine the allocation of scarce resources in the economy.

If the price of hot dogs increases, the demand for hot dog buns will

decrease

A movement upward and to the left along a demand curve is called a(n)

decrease in quantity demanded

An increase in the price of a good will

decrease quantity demanded.

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

demand schedule

Mike downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Mike's behavior demonstrates the law of

demand.

A movement downward and to the right along a demand curve is called a(n)

increase in quantity demanded.

A decrease in the price of a good will

increase quantity demanded.

A fundamental principle in demand analysis is that a change in price leads to

movement along the demand curve

The demand curve for a good is a line that relates

price and quantity demanded.

The law of demand states that

quantity demanded will vary inversely with the price of the good.

A decrease in quantity demanded

results in a movement upward and to the left along a demand curve.

An increase in demand is represented by a

shift of the demand curve to the right.

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by

the actions of government central planners.

A downward-sloping demand curve illustrates

the law of demand

In economics, "demand" refers to

the quantities of a good that people willing and are able to buy at various prices.

The demand for a good or service is determined by

those who buy the good or service

The supply of a good or service is determined by

those who sell the good or service