Question 1

One of the biggest benefits of a market-based economy is

Accepted Answer

A)  centralized planning. 
B)  the ability to adapt quickly to change. 
C)  government regulation. 
D)  consumer protection policies. 
A)  centralized planning. 
B)  the ability to adapt quickly to change. 
C)  government regulation. 
D)  consumer protection policies.

Question 2

What is the price of labor in a market?

Accepted Answer

A)  The supply rate. 
B)  The demand rate. 
C)  The net profit. 
D)  The wage rate. 
A)  The supply rate. 
B)  The demand rate. 
C)  The net profit. 
D)  The wage rate.

Question 3

Sale prices mean that the price is lowered for a _________ period of time.

Accepted Answer

A)  limited 
B)  long 
C)  extended 
D)  prolonged 
A)  limited 
B)  long 
C)  extended 
D)  prolonged

Question 4

Buyers and sellers who are geographically close are part of a national market.

Accepted Answer

A) True 
 B)False

Question 5

In contrast to the law of supply,sometimes ______ can reduce the quantity supplied.

Accepted Answer

A)  an increased price 
B)  a market supply curve 
C)  a market demand curve 
D)  price negotiations 
A)  an increased price 
B)  a market supply curve 
C)  a market demand curve 
D)  price negotiations

Question 6

If the quantity demanded increases sharply when the price drops,this illustrates what principle?

Accepted Answer

A)  The law of supply. 
B)  The law of demand. 
C)  The law of the curve. 
D)  Ceteris paribus. 
A)  The law of supply. 
B)  The law of demand. 
C)  The law of the curve. 
D)  Ceteris paribus.

Question 7

The supply schedule is a description of

Accepted Answer

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. 
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.

Question 8

Using the law of demand,what would generally happen if the price of gasoline were to rise to $7.00 per gallon?

Accepted Answer

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. 
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.

Question 9

Generally speaking,in the law of demand,the lower the price,the ________ the quantity demanded.

Accepted Answer

A)  lower 
B)  greater 
C)  supply schedule shows 
D)  market will adjust 
A)  lower 
B)  greater 
C)  supply schedule shows 
D)  market will adjust

Question 10

$$\begin{array} { | l | l | } 
\hline \text { Price } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} \
\hline \$ 0 & 1,000 \
\hline \$ 1 & 400 \
\hline \$ 2 & 200 \
\hline \$ 3 & 100 \
\hline \$ 4 & 25 \
\hline
\end{array}$$ Refer to the table,which shows the number of MP3 downloads demanded per month for the students at a certain university.Which of the following statements does not explain why the quantity demanded was not higher for a price of $0?

Accepted Answer

A)  There are only so many songs that people want to listen to. 
B)  Downloading an MP3 takes time. 
C)  MP3s take up space on a computer's hard drive. 
D)  People would rather pay for their downloads. 
A)  There are only so many songs that people want to listen to. 
B)  Downloading an MP3 takes time. 
C)  MP3s take up space on a computer's hard drive. 
D)  People would rather pay for their downloads.

Question 11

The individual quantity demanded is the amount the _____ is willing to _____ at a given price.

Accepted Answer

A)  seller, purchase 
B)  buyer, purchase 
C)  buyer, sell 
D)  seller, sell 
A)  seller, purchase 
B)  buyer, purchase 
C)  buyer, sell 
D)  seller, sell

Question 12

The individual quantity demanded is the amount the buyer is allowed to purchase at a given price.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a product that is sold primarily in a local market?

Accepted Answer

A)  Cheese. 
B)  Butter. 
C)  Milk. 
D)  Oil. 
A)  Cheese. 
B)  Butter. 
C)  Milk. 
D)  Oil.

Question 14

What determines a market supply schedule?

Accepted Answer

By combining the quantity supplied by al

Question 15

Households are generally buyers in the markets for products and sellers in ________ markets.

Accepted Answer

A)  goods 
B)  service 
C)  natural resource 
D)  labor 
A)  goods 
B)  service 
C)  natural resource 
D)  labor

Question 16

The law of supply says that higher prices tend to _____ the quantity supplied of a good or service,assuming no other changes.

Accepted Answer

A)  increase 
B)  decrease 
C)  have no effect on 
D)  first increase, then decrease 
A)  increase 
B)  decrease 
C)  have no effect on 
D)  first increase, then decrease

Question 17

The rate at which buyers exchange money for a good or service is known as the price.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an example of a good provided by a market?

Accepted Answer

A)  Online video games. 
B)  Airline tickets between New York and Los Angeles. 
C)  Pizza in Toledo, Ohio. 
D)  The air we breathe. 
A)  Online video games. 
B)  Airline tickets between New York and Los Angeles. 
C)  Pizza in Toledo, Ohio. 
D)  The air we breathe.

Question 19

Ceteris paribus,when used by economists,means

Accepted Answer

A)  for every action, there is a reaction. 
B)  things never change. 
C)  all other things equal. 
D)  buyer beware. 
A)  for every action, there is a reaction. 
B)  things never change. 
C)  all other things equal. 
D)  buyer beware.

Question 20

Does the law of supply apply to labor markets?

Accepted Answer

A)  Yes, because all workers will increase the number of hours they work if their wages increase. 
B)  Yes, because some workers who are less committed to the labor force, like teenagers, will decide to work if wages increase. 
C)  No, because the laws of supply and demand both apply only to product markets. 
D)  No, because workers have no control over the number of hours they work. 
A)  Yes, because all workers will increase the number of hours they work if their wages increase. 
B)  Yes, because some workers who are less committed to the labor force, like teenagers, will decide to work if wages increase. 
C)  No, because the laws of supply and demand both apply only to product markets. 
D)  No, because workers have no control over the number of hours they work.

One of the biggest benefits of a market-based economy is

What is the price of labor in a market?

Sale prices mean that the price is lowered for a _________ period of time.

Buyers and sellers who are geographically close are part of a national market.

In contrast to the law of supply,sometimes ______ can reduce the quantity supplied.

If the quantity demanded increases sharply when the price drops,this illustrates what principle?

The supply schedule is a description of

Using the law of demand,what would generally happen if the price of gasoline were to rise to $7.00 per gallon?

Generally speaking,in the law of demand,the lower the price,the ________ the quantity demanded.

Price Quantity Demanded \ 0 1,000 \ 1 400 \ 2 200 \ 3 100 \ 4 25 Refer to the table,which shows the number of MP3 downloads demanded per month for the students at a certain university.Which of the following statements does not explain why the quantity demanded was not higher for a price of $0?

The individual quantity demanded is the amount the _ is willing to _ at a given price.

The individual quantity demanded is the amount the buyer is allowed to purchase at a given price.

Which of the following is an example of a product that is sold primarily in a local market?

What determines a market supply schedule?

Households are generally buyers in the markets for products and sellers in ________ markets.

The law of supply says that higher prices tend to _____ the quantity supplied of a good or service,assuming no other changes.

The rate at which buyers exchange money for a good or service is known as the price.

Which of the following is not an example of a good provided by a market?

Ceteris paribus,when used by economists,means

Does the law of supply apply to labor markets?

Introduction

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

Exam 2: Demand and Supply: The Basics of the Market Economy

One of the biggest benefits of a market-based economy is

What is the price of labor in a market?

Sale prices mean that the price is lowered for a _________ period of time.

Buyers and sellers who are geographically close are part of a national market.

In contrast to the law of supply,sometimes ______ can reduce the quantity supplied.

If the quantity demanded increases sharply when the price drops,this illustrates what principle?

The supply schedule is a description of

Using the law of demand,what would generally happen if the price of gasoline were to rise to $7.00 per gallon?

Generally speaking,in the law of demand,the lower the price,the ________ the quantity demanded.

Price Quantity Demanded \ 0 1,000 \ 1 400 \ 2 200 \ 3 100 \ 4 25 Refer to the table,which shows the number of MP3 downloads demanded per month for the students at a certain university.Which of the following statements does not explain why the quantity demanded was not higher for a price of $0?

The individual quantity demanded is the amount the _____ is willing to _____ at a given price.

The individual quantity demanded is the amount the buyer is allowed to purchase at a given price.

Which of the following is an example of a product that is sold primarily in a local market?

What determines a market supply schedule?

Households are generally buyers in the markets for products and sellers in ________ markets.

The law of supply says that higher prices tend to _____ the quantity supplied of a good or service,assuming no other changes.

The rate at which buyers exchange money for a good or service is known as the price.

Which of the following is not an example of a good provided by a market?

Ceteris paribus,when used by economists,means

Does the law of supply apply to labor markets?

Introduction

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

The individual quantity demanded is the amount the _ is willing to _ at a given price.