EOC_Answers_Ch04 - Chapter 4: Supply and Demand True or...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
True or False 1. Differences in the conditions under which the exchange between buyers and sellers occurs make it difficult to precisely define a market. T 2. All markets are effectively global in scope. F 3. The relationship between price and quantity demanded is inverse or negative. T 4. The market demand curve is the vertical summation of individual demand curves. F 5. A change in a good’s price does not change its demand. T 6. A change in demand is illustrated by a shift in the entire demand curve. T 7. Because personal tastes differ, what are substitutes for one person may not be substitutes for another person. T 8. Two goods are complements if an increase in the price of one causes an increase in the demand for the other. F 9. Those goods for which falling income leads to decreased demand are called inferior goods. F 10. Either an increase in the number of buyers or an increase in tastes or preferences for a good or service will increase the market demand for a good or service. T 11. A decrease in the price of ice cream would cause an increase in the demand for frozen yogurt, a substitute. F 12. The law of supply states that, other things being equal, the quantity supplied will vary directly (a positive relationship) with the price of the good. T 13. The market supply curve for a product is the vertical summation of the supply curves for individual firms. F 14. A change in the price of a good leads to a change in the quantity supplied, but not to a change in its supply. T 1 5. An increase in supply leads to a movement up along the supply curve. F 16. A decrease in supply shifts the supply curve to the left. T 17. Just as demanders will demand more now if the price of a good is expected to rise in the near future, sellers will supply more now if the price of a good is expected to rise in the near future. F 18. Both technological progress and cost-increasing regulations will increase supply. F Multiple Choice 1. Which of the following is a market? a. a garage sale b. a restaurant c. the New York Stock Exchange d. an eBay auction e. all of the above 2. In a competitive market, a. there are a number of buyers and sellers. b. no single buyer or seller can appreciably affect the market price. c. sellers offer similar products. d. all of the above are true. 3. If the demand for milk is downward sloping, then an increase in the price of milk will result in a(n) a. increase in the demand for milk. b. decrease in the demand for milk. c. increase in the quantity of milk demanded. d. decrease in the quantity of milk demanded. e. decrease in the supply of milk. 4. Which of the following would be most likely to increase the demand for jelly? a.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 10

EOC_Answers_Ch04 - Chapter 4: Supply and Demand True or...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online