Practice Test 4-5 - Practice Test 4-5 Multiple Choice...

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Practice Test 4-5 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A competitive market is one in which a. there is only one seller of the product. b. each seller of the product is free to set the price of his product. c. each seller attempts to compete with other sellers, causing fewer sellers in the market. d. there are so many buyers and many sellers that each has a negligible impact on price. ____ 2. Buyers and sellers who have no influence on market price are referred to as a. price makers. b. market pawns. c. price takers. d. powerless. ____ 3. Generally, the market for ice cream would be considered a. a monopolistic market. b. a competitive market. c. more organized than an auction. d. a market where individual sellers have significant pricing power. ____ 4. A market with only a few sellers would be a. a monopoly. b. an oligopoly. c. a competitive market. d. a monopolistically competitive market. ____ 5. 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 ____ 6. If the price of a substitute to good X increases, then the a. demand for good X will decrease. b. market price of good X will decrease. c. demand for good X will increase. d. quantity demanded for good X will increase. ____ 7. Two goods are substitutes if a decrease in the price of one good a. increases the demand for the other good. b. reduces the demand for the other good. c. reduces the quantity demanded of the other good. d. increases the quantity demanded of the other good. ____ 8. Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this? a. It would decrease. b. It would increase. c. It would be unaffected. d. There is insufficient information given to answer the question. ____ 9. Which of the following is NOT a determinant of demand? a. the price of a resource
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b. the price of a complementary good c. the price of the good next month d. the price of a substitute good ____ 10. 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. ____ 11. A demand curve is a. the downward-sloping line relating the price of the good to the quantity demanded. b. the upward-sloping line relating price to quantity supplied. c. the curve that relates income to quantity demanded. d. showing the same relationship between two goods as a production possibilities frontier.
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This note was uploaded on 03/18/2012 for the course ITEC 3290 taught by Professor Dunn during the Spring '12 term at East Carolina University .

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Practice Test 4-5 - Practice Test 4-5 Multiple Choice...

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