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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. ANSWER: b. demand and supply. TYPE: M SECTION: 1 DIFFICULTY: 1 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 ANSWER: c. supply and demand TYPE: M SECTION: 1 DIFFICULTY: 1 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. ANSWER: d. the price of frosted shredded wheat. TYPE: M SECTION: 1 DIFFICULTY: 2 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 ANSWER: d. suppliers and demanders together TYPE: M SECTION: 1 DIFFICULTY: 1 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. ANSWER: a. group of demanders and suppliers of a particular good or service. TYPE: M SECTION: 1 DIFFICULTY: 1 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. ANSWER: c. demand and supply. TYPE: M SECTION: 1 DIFFICULTY: 1 87 88 Chapter 4/The Market Forces of Supply and Demand 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. ANSWER: b. Buyers determine demand and sellers determine supply. TYPE: M SECTION: 1 DIFFICULTY: 2 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. ANSWER: c. both price and quantity....
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- Spring '10