Homework #5 Micro-Economics

In the market economy, supply and demand determine.....
A - both the quantity of each good produced and the price at which it is sold
B - the quantity of each good produced but not the price at which it is sold
C - the price at which each good is sold but not the quantity of each good produced
D - neither the quantity of each good produced nor the price at which it is sold

The demand for a good or service is determined by...
A - those who buy the good or service
B - the government
C - those who sell the good or service
D - both those who buy and those who sell the good or service

The supply of a good or service is determined by...
A - those who buy the good or service
B - the government
C - those who sell the good or service
D - both those who buy and those who sell the good or service

For a market for a good or service to exist, there must be a...
A - group of buyers and sellers
B - specific time and place at which the good or service is traded
C - high degree of organization present
D - All of the above are correct

A competitive market is a market in which...
A - an auctioneer helps set prices and arrange sales
B - there are only a few sellers
C - the forces of supply and demand do not apply
D - no individual buyer or seller has any significant impact on the market price

In a competitive market, the quantity of a product produced and the price of the product are determined by...
A - a single buyer
B - a single seller
C - one buyer and one seller working together
D - all buyers and all sellers

In competitive markets,
A - firms produce identical products
B - no individual buyer can influence the marker price
C - no individual seller can influence the market price
D - all of the above are correct

A decrease in quantity demanded...
A - results in a movement downward and to the right along a demand curve
B - results in a movement upward and to the left along a demand curve
C - shifts the demand curve to the left
D - shifts the demand curve to the right

A decrease in the price of a good will...
A - increase demand
B - decrease demand
C - increase quantity demanded
D - decrease quantity demanded

Figure 4-1. The movement from point A to point B on the graph shows a(n)...
A - decrease in demand
B - increase in demand
C - decrease in quantity demanded
D - increase in quantity demanded

A downward-sloping demand curve illustrates
A - that demand decreases over time
B - that prices fall over time
C - the relationship between income and quantity demanded
D - the law of demand

Which of the following demonstrates the law of demand?
A - After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise
B - Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal
C - Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal
D - Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?
A - Students would purchase fewer than 750 cups per day
B - Student would continue to purchase 750 cups per day
C - Students would purchase more than 750 cups per day
D - We do not have enough information to answer this question

When we move along a given demand curve,
A - only price is held constant
B - income and price are held constant
C - all nonprime determinants of demand are held constant
D - all determinants of quantity demanded are held constant

When quantity demanded decreases at every possible price, the demand curve has...
A - shifted to the left
B - shifted to the right
C - no shifted; rather, we have moved along the demand curve to a new point on the same curve
D - not shifted; rather, the demand curve has become flatter