Ch003TestBank[1] - CHAPTER 3 Demand, Supply, and Market...

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CHAPTER 3 Demand, Supply, and Market Equilibrium Topic Question numbers ___________________________________________________________________________________________________ 1. Demand and demand curve 1-18 2. Determinants of demand 19-55 3. Change in demand versus change in quantity demanded 56-69 4. Supply and supply curve 70-77 5. Determinants of supply 78-92 6. Equilibrium; rationing function 93-133 7. Changes in equilibrium price and quantity 134-181 8. Government-set prices 182-200 Consider This 201-206 Last Word 207-210 True-False 211-228 ___________________________________________________________________________________________________ Multiple Choice Questions Demand and demand curve Econ: 45 LO: 3-1 Macro: 45 Micro: 45 Topic: 1 Type: Definition 1. A market: A) reflects upsloping demand and downsloping supply curves. B) entails the exchange of goods, but not services. C) is an institution that brings together buyers and sellers. D) always requires face-to-face contact between buyer and seller. Ans: C Econ: 45 LO: 3-1 Macro: 45 Micro: 45 Topic: 1 Type: Definition 2. Markets explained on the basis of supply and demand: A) assume many buyers and many sellers of a standardized product. B) assume market power so that buyers and sellers bargain with one another. C) do not exist in the real-world economy. D) are approximated by markets in which a single seller determines price. Ans: A Econ: 46 LO: 3-1 Macro: 46 Micro: 46 Topic: 1 Type: Definition 3. The law of demand states that: A) price and quantity demanded are inversely related. B) the larger the number of buyers in a market, the lower will be product price. C) price and quantity demanded are directly related. D) consumers will buy more of a product at high prices than at low prices.
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Ans: A Econ: 47 LO: 3-1 Macro: 47 Micro: 47 Topic: 1 Type: Definition 4. Graphically, the market demand curve is: A) steeper than any individual demand curve that is part of it. B) greater than the sum of the individual demand curves. C) the horizontal sum of individual demand curves. D) the vertical sum of individual demand curves. Ans: C Econ: 45 LO: 3-1 Macro: 45 Micro: 45 Topic: 1 Type: Definition 5. The demand curve shows the relationship between: A) money income and quantity demanded. C) price and quantity demanded. B) price and production costs. D) consumer tastes and the quantity demanded. Ans: C Econ: 45 LO: 3-1 Macro: 45 Micro: 45 Topic: 1 Type: Definition 6. Economists use the term demand to A) a particular price-quantity combination on a stable demand curve. B) the total amount spent on a particular commodity over a stipulated time period. C) an upsloping line on a graph that relates consumer purchases and product price. D)
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Ch003TestBank[1] - CHAPTER 3 Demand, Supply, and Market...

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