Questions:
1.What forces humans to make trade-offs?
A. Scarcity.
B. Productive inefficiency.
C. The government.
D. Unemployment.
2) When the price of a good increases, ceteris paribus, the:
A. quantity demanded of the good will increase.
B. demand for the good will decrease.
C. quantity demanded of the good will decrease.
D. demand for the good will increase.
3) The existence of a surplus in a market will cause market price to:
A. rise and quantity supplied to increase.
B. fall and quantity supplied to increase.
C. fall and quantity supplied to decrease.
D. rise and quantity supplied to decrease.
4) An increase in the demand for bananas will NOT be caused by:
A. a drop in the market price of bananas.
B. a rise in the price of apples.
C. news that bananas help relieve stress in people.
D. buyers switching to a more healthy diet.
5) If wages of workers in the car manufacturing industry rise and the wages rises are not due to increases in worker productivity, then the market:
A. demand for cars would increase because buyer incomes would be higher.
B. supply of cars would increase because the price of cars would be higher.
C. demand for cars would decrease because the price of cars would be higher.
D. supply of cars would decrease because costs of production would be higher.
6) With a normal good:
A. as consumer income increases, demand increases.
B. as price decreases, the quantity demanded decreases.
C. as price increases, the quantity demanded decreases.
D. if buyers expect a higher future price, demand will increase today.
7) If we know the individual demands of all buyers in a market, we can find market demand by:
A. adding all individual prices buyers will pay for each quantity.
B. adding all individual quantities buyers will buy for each price.
C. observing how much is sold in the market at the current price.
D. multiplying all the individual prices by the individual quantity demanded.
8) If the demand for good X decreases, when the price of good Y decreases, then:
A. goods X and Y are complements.
B. goods X and Y are inferior goods.
C. goods X and Y are normal goods.
D. goods X and Y are substitutes.
9) A change in the amount bought of a product in response to a change in its price is called a change in:
A. supply.
B. quantity supplied.
C. quantity demanded.
D. demand.
10) A shortage in a market means:
A. demand is greater than supply.
B. quantity demanded is greater than quantity supplied.
C. supply is greater than demand.
D. quantity supplied is greater than quantity demanded.