economics unit 3 test multiple choice – Flashcards
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The term price takers refers to buyers and sellers in:
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in a (perfectly) competative market
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Which of the following would most likely serve as an example of a monopoly?
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local cable company
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The negative relationship between price and quantity demanded:
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it applys to most goods and it is represented by a downward slopping curve its called the law of demand
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Each of the following is a determinant of demand except:
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technology is NOT
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Two goods are substitutes if a decrease in the price of one good:
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it decreaces the demand for the other good
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A likely example of complementary goods for most people would be:
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hambergers and french fries
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You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result:
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your demand for peanut butter will increase today
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The law of demand says that:
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an increase in price causes quantity demand to decrease
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Which of the following demonstrates the law of demand?
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know law of demand
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The market demand curve
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it represents the sum of the quantities demanded by all the buyers
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Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for:
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the current demand for razors will increase
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Quantity demanded falls as the price rises and rises as the price falls, so we say that
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quantity demanded is negativily related to price
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If Francis experiences a decrease in his income, we would expect that, as a result, Francis's demand for:
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normal goods to decrease
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Currently you purchase 6 packages of hot dogs a month. You will graduate from college in December and you will start a new job in January. You have no plans to purchase hot dogs in January. For you, hot dogs are.
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inferior good
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Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month. As a result of this information, today's demand curve for Mustangs.
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it would shift the curve to the left in a decrease
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Which of the following events could shift the demand curve for gasoline to the left?
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a public service announcement on TV telling people to go walk and ride bikes
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If a study by medical researchers found that brown sugar caused weight loss while white sugar caused weight gain we likely would see:
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brown sugar
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according to the law of supply.
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the supply curve of a good is upward slopping
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Which of the following events could cause an increase in the supply of ceiling fans?
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if the number of sellers increases
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Suppose you make jewelry. If the price of gold falls, we would expect you to:
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you would be willing to produce more jewelry
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Which of the following events could shift both the demand curve and the supply curve for a good?
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people change their expectations
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In general, elasticity is a measure of:
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it is the measure of how much buyers or sellers respond to changes in market conditions (manly price)
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The Price Elasticity of Demand measures how much:
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how much quantity demand responds in a change in price
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Demand is said to be elastic if:
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if buyers respond substationally to a change in price
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For a good that is a luxury, demand:
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demand is elastic
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If a person only occasionally buys a cup of coffee, his demand for coffee is probably:
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demand is elastic
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A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is:
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inelastic
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other things equal, the demand for a good tends to be more inelastic, the:
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the fewer the avalable substituts
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Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because:
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buyers are more sensative to a change in price when given more time to react
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It is likely that: A. the demand for flat-screen computer monitors is more elastic than the demand for monitors in general. B. the demand for grandfather clocks is more elastic than the demand for wristwatches. C. the demand for cardboard is more elastic over a long period of time than over a short period of time. D. All of the above are correct.
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D ALL Of the Above
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Which of the following is NOT a determinant of the price elasticity of demand for a good?
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the steepness or flatness of the supply curve
