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Chapter 3 Test Bank
Multiple Choice Questions
1. The downward slope of the demand curve again illustrates the pattern that as
_____________ rises, ______________ decreases.
A. quantity demanded, price
B. quantity supplied, quantity demanded
C. price, quantity demanded
D. price, quantity supplied
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
2. The nature of demand indicates that as the price of a good increases:
A. suppliers wish to sell less of it.
B. more of it is produced.
C. more of it is desired.
D. buyers desire to purchase less of it.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
3. Any given demand or supply curve is based on the ceteris paribus assumption that
_________________________.
A. everything is variable.
B. all else is held equal
C. no one knows which variables will change and which will remain constant.
D. what is true for the individual is not necessarily true for the whole.
Answer: B
Reference:
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Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
4. The term "ceteris paribus" means that:
A. everything is variable.
B. all variables except those specified are constant.
C. no one knows which variables will change and which will remain constant.
D. what is true for the individual is not necessarily true for the whole.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
5. A supply curve is a graphical illustration of the relationship between price, shown on the
vertical axis, and _________________, shown on the horizontal axis.
A. demand
B. quantity
C. quantity supplied
D. quantity demanded
Answer: B
Reference:
Explanation:
6. Economists refer to the relationship that a higher price leads to a lower quantity demanded as
the _____________________.
A. income gap
B. market equilibrium
C. law of demand
D. price model
Answer: C
Reference:
Explanation:
7. A demand curve shows the relationship between price and ______________ on a graph.
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A. quantity demanded
B. quantity produced
C. economies of scale
D. costs
Answer: A
Reference:
Explanation:
8. _____________ refers to the total number of units that are purchased at that price.
A. quantity
B. quantity demanded
C. supply
D. market quantity
Answer: B
Reference:
Explanation:
9. In economics, the demand for a good refers to the amount of the good that people:
A. would like to have if the good were free.
B. will buy at various prices.
C. need to achieve a minimum standard of living.
D. will buy at alternative income levels.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
10. The demand curve for a typical good has a(n):
A. negative slope because some consumers switch to other goods as the price rises.
B. negative slope because consumer incomes fall as the price of the good rises.
C. negative slope because the good has less "snob appeal" as its price falls.
D. inverse slope because as the price goes up, the good has more profitability.
Answer: A
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Chapter 3 Test Bank
Multiple Choice Questions
1. The downward slope of the demand curve again illustrates the pattern that as
_____________ rises, ______________ decreases.
A. quantity demanded, price
B. quantity supplied, quantity demanded
C. price, quantity demanded
D. price, quantity supplied
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
2. The nature of demand indicates that as the price of a good increases:
A. suppliers wish to sell less of it.
B. more of it is produced.
C. more of it is desired.
D. buyers desire to purchase less of it.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
3. Any given demand or supply curve is based on the ceteris paribus assumption that
_________________________.
A. everything is variable.
B. all else is held equal
C. no one knows which variables will change and which will remain constant.
D. what is true for the individual is not necessarily true for the whole.
Answer: B
Reference:
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Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
4. The term "ceteris paribus" means that:
A. everything is variable.
B. all variables except those specified are constant.
C. no one knows which variables will change and which will remain constant.
D. what is true for the individual is not necessarily true for the whole.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
5. A supply curve is a graphical illustration of the relationship between price, shown on the
vertical axis, and _________________, shown on the horizontal axis.
A. demand
B. quantity
C. quantity supplied
D. quantity demanded
Answer: B
Reference:
Explanation:
6. Economists refer to the relationship that a higher price leads to a lower quantity demanded as
the _____________________.
A. income gap
B. market equilibrium
C. law of demand
D. price model
Answer: C
Reference:
Explanation:
7. A demand curve shows the relationship between price and ______________ on a graph.
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A. quantity demanded
B. quantity produced
C. economies of scale
D. costs
Answer: A
Reference:
Explanation:
8. _____________ refers to the total number of units that are purchased at that price.
A. quantity
B. quantity demanded
C. supply
D. market quantity
Answer: B
Reference:
Explanation:
9. In economics, the demand for a good refers to the amount of the good that people:
A. would like to have if the good were free.
B. will buy at various prices.
C. need to achieve a minimum standard of living.
D. will buy at alternative income levels.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
10. The demand curve for a typical good has a(n):
A. negative slope because some consumers switch to other goods as the price rises.
B. negative slope because consumer incomes fall as the price of the good rises.
C. negative slope because the good has less "snob appeal" as its price falls.
D. inverse slope because as the price goes up, the good has more profitability.
Answer: A
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