ch04 - Chapter 4 The Market Forces of Supply and Demand...

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Unformatted text preview: Chapter 4 The Market Forces of Supply and Demand MULTIPLE CHOICE 1 . The forces that make market economies work are a. price and quantity. b. demand and supply. c. the Senate and House of Representatives. d. the Constitution and the Bill of Rights. 2 . Which of the following are the words most commonly used by economists? a. surplus and shortage b. scarcity and human wants c. supply and demand d. price and quantity 3 . One result of a drought in the midwest could be an increase in a. farm machinery prices. b. the price of diesel fuel used in farming. c. migrant farm workers’ wages. d. the price of frosted shredded wheat. 4 . In a free market, who determines how much of a good will be sold and the price at which it is sold? a. suppliers b. demanders c. the government d. suppliers and demanders together 5 . A market is a a. group of demanders and suppliers of a particular good or service. b. group of people with common desires. c. place where only sellers meet. d. place where only buyers come together. 6 . The behavior of people as they interact with one another in markets is referred to as a. economics. b. interaction. c. demand and supply. d. social psychology. 7 . Which of the following is true? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers and sellers as one group determine supply. d. Buyers and sellers as one group determine demand. 8 . For each good produced in a market economy, demand and supply determine a. the price of the good, but not the quantity. b. the quantity of the good, but not the price. c. both price and quantity. d. neither price nor quantity is determined by demand and supply, because prices are ultimately set by producers. 9 . In a market economy, a. demand is determined by supply. b. supply is determined by demand. c. price is determined by quantity. d. quantity is determined by price. e. Either a or b are correct, depending on the product. 10 . Who is it that ultimately determines the demand for a product or service? a. those who buy the product or service b. the government c. the producers who create the product or service d. those who supply the raw materials used in the production of the good or service 11 . An economy’s scarce resources are allocated by a. economic planners. b. producers who use resources. c. prices for resources. d. government regulation of scarce resources....
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This note was uploaded on 04/14/2010 for the course ECON Econ 102 taught by Professor Kimball during the Winter '09 term at Harvard.

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ch04 - Chapter 4 The Market Forces of Supply and Demand...

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