practicequestions2fall2004 - Econ 102 Fall 2004 Practice...

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Econ 102 Fall 2004 Practice Questions 2 Readings: Chapter 3: Supply and Demand Concepts: Market Substitute Demand Complement Supply Price Ceiling Normal Good Price floors Inferior Good Consumer Surplus Comparative advantage Producer Surplus I. Binary Choices: 1) A market is a place where a group of sellers gather to decide on the price of the goods they will sell. a. True b. False 2) In all competitive markets participants take the price as given a. True b. False 3) The law of demand states that there is an inverse relationship between the quantity demanded and the price of a good, everything else held constant. a. True b. False 4) As income rises, the quantity demanded of a given good must increase. a. True b. False 5) A fall in the price of a ________ increases the demand for the other good and shifts the demand curve to the right for the other good. a. Complement b. Substitute 6) An expected rise in the price of gasoline will definitely lead to a decrease in the equilibrium quantity. a. True b. False 7) If the price of paper goes up, the quantity demanded in the market for books will:
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a. increase b. decrease 8) Because of increased access to the internet and the invention of numerous pirate software download programs, which make almost all software available for free
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This note was uploaded on 08/08/2008 for the course ECON 102 taught by Professor Drozd during the Spring '08 term at Wisconsin.

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practicequestions2fall2004 - Econ 102 Fall 2004 Practice...

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