Chapter 7 Economics Exam

1.

1 point

The supply curve slopes upward from left to right.

True

False

2.

1 point

If the government imposes more taxes, the supply curve will shift to the left.

True

False

3.

1 point

A change in the number of consumers can cause:

the market demand curve to shift

a substitution effect

a change in the quantity demanded

the individual demand curve to shift

4.

1 point

Falling prices signal producers to produce less and consumers to purchase more.

True

False

5.

1 point

The law of demand is geared towards producers.

True

False

6.

1 point

The law of supply is geared towards consumers.

True

False

7.

1 point

Increased government regulations can cause the supply curve to:

shift to the right

increase

decrease

shift to the left

8.

1 point

The law of supply states:

the quantity supplied varies directly with its price

the quantity demanded varies inversely with its price

the quantity supplied varies irregularly with its price

the quantity supplied varies inversely with its price

9.

1 point

If the costs of inputs increases, suppliers will offer fewer goods for sale at every possible price.

True

False

10.

1 point

The law of demand states that:

all people have the ability, desire, and willingness to buy

less will be purchased at low prices than at high ones

more will be purchased at low prices than at high ones

approximately the same amount will be purchased at low prices and at higher prices

11.

1 point

When a market economy operates without restrictions, shortages and surpluses are eliminated.

True

False

12.

1 point

When producers offer fewer products for sale at each and every price,

the supply curve has shifted to the right

the price per unit decreases

the supply curve has shifted to the left

they expect subsidies

13.

1 point

There is an inverse relationship between quantity demanded and price.

True

False

14.

1 point

What is the main difference between the individual demand curve and the market demand curve?

only the individual demand curve is downward sloping

only the market demand curve shows demand for everyone in the market

only the market demand curve shows a range of prices that might prevail in the market at a given time

only the individual demand curve shows how prices affect demand

15.

1 point

The percentage of your total budget spent on an item will also determine whether its demand is elastic or inelastic.

True

False

16.

1 point

How does the change in the price of a good affect its complement?

an increase in the price of a good usually leads to a decrease in the demand for its complement

a decrease in the price of a good usually has no effect on its complement

an increase in the price of a good usually leads to an increase in the demand for its complement

a decrease in the price of a good usually leads to a decrease in the demand for its complement

17.

1 point

When prices are above the equilibrium price,

consumers purchase none of the items supplied

suppliers produce more than consumers want to purchase

consumers purchase more of the items supplied

suppliers have less incentive to supply as much as is desired

18.

1 point

Based on utility, people decide what to buy and how much they are willing and able to pay.

True

False

19.

1 point

Which of the following is an example of substitutes?

computers and software

butter and margarine

cameras and film

flashlights and batteries

20.

1 point

The demand curve is always

upward sloping

irregular

downward sloping

level

21.

1 point

The supply curve is:

irregular

downward sloping

backward sloping

upward sloping

22.

1 point

In economic terms, the marketplace:

exists only at the national level

exists only at the local level

operates through voluntary exchange

is a place where people buy food

23.

1 point

As the price rises for a good, the quantity supplied generally rises.

True

False

24.

1 point

Soda brands, such as coke, typically have inelastic demand.

True

False

25.

1 point

A decrease in the demand for a good together with an increase in supply would cause:

increase in production

shortage of the good

equilibrium price

surplus of the good

26.

1 point

Shortages put pressure on prices to rise.

True

False

27.

1 point

If a consumer cannot postpone the purchase of a product, demand tends to be:

unit elastic

unpredictable

inelastic

elastic

28.

1 point

Which of the following can cause an increase in supply?

fewer sellers in the marketplace

a decrease in the cost of inputs

a decrease in productivity

an increase in taxes

29.

1 point

An example of a good that would have elastic demand is insulin for diabetics.

True

False

30.

1 point

How does the demand curve show an increase in demand?

the curve shifts right

there is no change in the curve

the curve shifts left

there is movement along the curve

31.

1 point

Which of the following will cause the market supply curve to shift?

a change in the number of consumers

a change in the price of the product

a change in the demand for the product

a change in the number of sellers offering the product

32.

1 point

A change in quantity demanded is caused by a change in the price of the good, and is shown as movement along the demand curve.

True

False

33.

1 point

In a market economy, the forces underlying demand and supply have a push-pull relationship that ultimately leads to an equilibrium price.

True

False

34.

1 point

Which of the following illustrates elastic demand?

the demand for medical services

purchasing fresh vegetables in the summer

purchasing table salt at different prices

the demand for tobacco

35.

1 point

Buying one drink instead of two drinks at lunch time describes what concept?

demand

diminishing marginal utility

consumerism

marginal utility