Problem%20Set%20Chp.3

# Problem%20Set%20Chp.3 - Problem Set Chp.3 Demand Supply and...

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Problem Set Chp.3: Demand, Supply and Market Equilibrium MULTIPLE CHOICE: Choose the one alternative that best completes the statement or answers the question. 1. Firms are on the ________ side of input (factor) markets and on the ________ side of output (product) markets. A. supply; demand B. supply; supply C. demand; supply D. demand; demand 2. In the goods and services market, households A. and firms are both buyers. B. are sellers and firms are buyers. C. are buyers and firms are sellers. D. and firms are both sellers. 3. Which of the following would NOT be a determinant of demand? A. the price of related goods B. income C. tastes D. the prices of the inputs used to produce the good 4. The amount of the good buyers are willing and able to purchase is the A. demand. B. quantity supplied. C. quantity demanded. D. supply. 5. Which of the following is held constant along the demand curve? A. Price of the good B. Quantity C. Income D. Both A and B 6. As long as households have limited incomes and wealth, all ________ curves will intersect the ________ axis. A. demand; quantity B. demand; price C. supply; price D. supply; quantity 1

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7. Alyssa rents 5 movies per month when the price is \$3.00 each and 7 movies per month when the price is \$2.50. Alyssa has demonstrated the A. law of price. B. law of supply. C. actions of an irrational consumer. D. law of demand. 8. The law of demand says that when price A. rises, quantity demanded falls. B. rises, quantity demanded rises also. C. falls, quantity supplied rises. D. falls, quantity supplied falls also. E. rises, demand falls. 9. The downward-sloping line which relates prices and quantity demanded is called the A. demand schedule. B. demand curve. C. quantity demanded line. D. quantity demanded curve. 10. If a good is “normal,” then an increase in income will result in A. no change in the demand for the good. B. an increase in the demand for the good. C. a decrease in the demand for the good. D. a lower market price. 11. Suppose you have recently inherited a property worth of \$10,000; at the beginning of the month you got your monthly pay check (from your job) of \$3,000, you have borrowed \$2,000 dollar from a friend and you spent \$1,000 at the end of the month then your wealth is A. \$14,000 B. \$10,000 C. \$4,000 D. \$8,000 E. \$12,000 F. \$15,000 12. Currently you purchase 6 packages of hot dogs a month. You will be graduating soon and will start your new job. You have no plans to purchase hot dogs once you graduate and join the job. For you, hot dogs are A. a “college-only” good. B. a normal good. C. an inferior good. D. a complementary good. 2
13. An example of substitute goods would be A. tennis balls and tennis rackets. B.

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Problem%20Set%20Chp.3 - Problem Set Chp.3 Demand Supply and...

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