week4 quiz(1) - Textbook Reading Comprehension Questions...

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1 Textbook Reading Comprehension Questions: Unit II (sections 1-4) 1. Which of the following is the Latin term for “everything else held constant”? 1. Carpe Diem 2. Vice versa 3. Ceteris Paribus 4. None of the above 5. All of the above 2. How is the market price for a good determined in a competitive market? 1. Producers choose the price. 2. Consumers choose the price. 3. The government chooses the price. 4. Producers and consumers negotiate the price. 5. Economists choose the price. 3. What does the Law of Demand state? 1. There is an inverse relationship between the price of a good and the quantity that consumers are willing and able to purchase. 2. There is always more demand for a good than producers are able to produce. 3. Consumers who demand more goods must also pay higher prices for the goods. 4. For every good demanded, a good must be supplied. 5. Consumers demand more of a good when the price of the good is higher. 4. What does the Law of Supply state? 1. Producers produce as many goods as possible in order to satisfy as many needs as possible. 2. Individual producers are each able to change the market supply. 3. There is a positive relationship between price and the quantity that producers are willing to supply. 4. Only producers are allowed to supply goods to the market. 5. Producers can only make a profit when they supply goods. 5. For the law of demand to be observed in a market, what factors should be held constant? 1. Price and quantities of the good demanded 2. Price and consumers’ income 3. Consumers’ income and preferences 4. Quantities of the good demanded and consumers’ preferences 5. Price and consumers’ preferences 6. If a market is not currently in equilibrium, we can get to the equilibrium outcome by: 1. reducing price if there is an excess supply. 2. increasing price if there is an excess demand 3. allowing unhindered negotiation between buyers and sellers. 4. All of the above 5. None of the above
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