MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) All of the following, except one, is demand. Which is the exception?
A) The quantities which consumers want to buy.
B) A hypothetical construct which expresses the desire and ability to purchase, not at a single
price, but over a range of prices.
C) The quantities which consumers are willing and able to buy per period of time at various
prices.
D) The relationship between various prices and quantities demanded for a product.
Answer: A
2) What is the term for the quantities which consumers are willing and able to buy per period of time at
various prices?
A) Demand.
B) Desire.
C) Human wants.
D) Supply.
E) Market.
Answer: A
3) What is the term for a table that shows the various quantities demanded per period of time at
different prices?
A) Production possibilities table.
B) Schedule of equilibrium points.
C) Supply schedule.
D) Demand schedule.
E) Market schedule.
Answer: D
4) What is meant by the term change in the quantity demanded?
A) The change in the quantity which results from a change in any factor other than the price and
implies a movement along the demand curve.
B) The change in the quantity which results from a price change and implies a movement along
the demand curve.
C) The change in the quantity which results from a change in any factor other than the price and
implies a shift in the demand curve.
D) The change in the quantity which results from a price change and implies a shift in the demand
curve.
Answer: B
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, 5) What is the most likely reason that your instructor does not have a demand for a top-of-the-line
BMW?
A) He or she cannot afford to own such an expensive car.
B) He or she does not wish to own such an expensive car.
C) He or she would prefer to own no car at all.
D) He or she does not want to own a German-made car.
Answer: A
6) What is meant by the term ceteris paribus?
A) Other things being equal. B) A downward-sloping demand curve.
C) All things vary. D) Prices remain constant.
Answer: A
7) What is the correct way to label the axis on a graph which illustrates a demand curve?
A) Price on horizontal axis and quantity on the vertical axis.
B) Income on the horizontal axis and price on the vertical axis.
C) Price on the horizontal axis and income on the vertical axis.
D) Quantity on horizontal axis and price on the vertical axis.
Answer: D
8) What is the term for income measured by the amount of goods and services which it will buy?
A) Net income.
B) Real income.
C) Nominal income.
D) Actual income.
E) Income effect.
Answer: B
9) What is the term for the total demand for a product by all consumers?
A) Schedule of wants.
B) Market Demand.
C) Market Supply.
D) Quota.
E) Product market.
Answer: B
10) What is market demand?
A) An increase or decrease in prices based on the quantity demanded of a product.
B) The total demand for a product by all consumers.
C) The desire to purchase cheaper competing products rather than relatively more expensive
products.
D) The substitution of one product for another as a result of a change in their relative prices.
Answer: B
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,11) What is the income effect?
A) The effect of a change in income on the demand for a product.
B) The effect of a change in income on the demand for a substitute product.
C) The effect of a change in income on the demand for an inferior product.
D) The effect of a price change on real income and therefore on the quantity demanded of a
product.
Answer: D
12) What is the substitution effect?
A) The substitution of one product for another as a result of a change in their relative prices.
B) The substitution of a normal product for an inferior product as the result of an increase in
income.
C) The effect that a change in income has on the demand for a substitute product.
D) The sacrifice which has to be made when an additional quantity of one product is purchased.
Answer: A
13) What is the term for the substitution of one product for another as a result of a change in their
relative prices?
A) Substitution effect. B) Income effect.
C) Market effect. D) Law of demand.
Answer: A
14) What is the effect of a decrease in the price of a product?
A) It will decrease the quantity demanded. B) It will increase the demand.
C) It will decrease the demand. D) It will increase the quantity demanded.
Answer: D
15) What is the term for the effect which a price change has on real income and therefore on the
quantity demanded of a product?
A) Market demand.
B) Change in the quantity demanded.
C) Substitution effect.
D) Income effect.
E) Opportunity cost.
Answer: D
16) Which of the following is explained by the combination of the substitution effect and the income
effect?
A) Ceteris paribus. B) Market demand.
C) Downward sloping demand curves. D) Equilibrium price.
Answer: C
3
, 17) Which of the following is explained by the combination of the substitution effect and the income
effect?
A) Equilibrium price.
B) The inverse relationship between price and quantity demanded.
C) Market demand.
D) The direct relationship between price and quantity demanded.
Answer: B
18) What is supply?
A) The total demand for a product by all consumers.
B) The quantity which prevails at the equilibrium price.
C) The quantities which producers are both willing and able to sell per period of time at various
prices.
D) The quantity sold at a certain price.
Answer: C
19) What is the term for a table showing the various quantities supplied per period of time at different
prices?
A) Supply schedule. B) Demand schedule.
C) Market supply. D) Price schedule.
Answer: A
20) What is the term for a change in the amounts that a producer is willing and able to make available as
a result of a price change?
A) Change in the individual supply. B) Change in the market demand.
C) Change in the market supply. D) Change in the quantity supplied.
Answer: D
21) What is the term for the quantities which producers are willing and able to sell per period of time at
various prices?
A) Quantity demanded.
B) Surplus.
C) Quantity supplied.
D) Supply.
E) Product availability.
Answer: D
22) What is supply?
A) The quantities that producers are willing and able to sell per period of time at various prices.
B) The total quantity of goods produced but not sold.
C) The maximum possible quantity that producers could make available.
D) The quantity made available by a typical producer.
Answer: A
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1) All of the following, except one, is demand. Which is the exception?
A) The quantities which consumers want to buy.
B) A hypothetical construct which expresses the desire and ability to purchase, not at a single
price, but over a range of prices.
C) The quantities which consumers are willing and able to buy per period of time at various
prices.
D) The relationship between various prices and quantities demanded for a product.
Answer: A
2) What is the term for the quantities which consumers are willing and able to buy per period of time at
various prices?
A) Demand.
B) Desire.
C) Human wants.
D) Supply.
E) Market.
Answer: A
3) What is the term for a table that shows the various quantities demanded per period of time at
different prices?
A) Production possibilities table.
B) Schedule of equilibrium points.
C) Supply schedule.
D) Demand schedule.
E) Market schedule.
Answer: D
4) What is meant by the term change in the quantity demanded?
A) The change in the quantity which results from a change in any factor other than the price and
implies a movement along the demand curve.
B) The change in the quantity which results from a price change and implies a movement along
the demand curve.
C) The change in the quantity which results from a change in any factor other than the price and
implies a shift in the demand curve.
D) The change in the quantity which results from a price change and implies a shift in the demand
curve.
Answer: B
1
, 5) What is the most likely reason that your instructor does not have a demand for a top-of-the-line
BMW?
A) He or she cannot afford to own such an expensive car.
B) He or she does not wish to own such an expensive car.
C) He or she would prefer to own no car at all.
D) He or she does not want to own a German-made car.
Answer: A
6) What is meant by the term ceteris paribus?
A) Other things being equal. B) A downward-sloping demand curve.
C) All things vary. D) Prices remain constant.
Answer: A
7) What is the correct way to label the axis on a graph which illustrates a demand curve?
A) Price on horizontal axis and quantity on the vertical axis.
B) Income on the horizontal axis and price on the vertical axis.
C) Price on the horizontal axis and income on the vertical axis.
D) Quantity on horizontal axis and price on the vertical axis.
Answer: D
8) What is the term for income measured by the amount of goods and services which it will buy?
A) Net income.
B) Real income.
C) Nominal income.
D) Actual income.
E) Income effect.
Answer: B
9) What is the term for the total demand for a product by all consumers?
A) Schedule of wants.
B) Market Demand.
C) Market Supply.
D) Quota.
E) Product market.
Answer: B
10) What is market demand?
A) An increase or decrease in prices based on the quantity demanded of a product.
B) The total demand for a product by all consumers.
C) The desire to purchase cheaper competing products rather than relatively more expensive
products.
D) The substitution of one product for another as a result of a change in their relative prices.
Answer: B
2
,11) What is the income effect?
A) The effect of a change in income on the demand for a product.
B) The effect of a change in income on the demand for a substitute product.
C) The effect of a change in income on the demand for an inferior product.
D) The effect of a price change on real income and therefore on the quantity demanded of a
product.
Answer: D
12) What is the substitution effect?
A) The substitution of one product for another as a result of a change in their relative prices.
B) The substitution of a normal product for an inferior product as the result of an increase in
income.
C) The effect that a change in income has on the demand for a substitute product.
D) The sacrifice which has to be made when an additional quantity of one product is purchased.
Answer: A
13) What is the term for the substitution of one product for another as a result of a change in their
relative prices?
A) Substitution effect. B) Income effect.
C) Market effect. D) Law of demand.
Answer: A
14) What is the effect of a decrease in the price of a product?
A) It will decrease the quantity demanded. B) It will increase the demand.
C) It will decrease the demand. D) It will increase the quantity demanded.
Answer: D
15) What is the term for the effect which a price change has on real income and therefore on the
quantity demanded of a product?
A) Market demand.
B) Change in the quantity demanded.
C) Substitution effect.
D) Income effect.
E) Opportunity cost.
Answer: D
16) Which of the following is explained by the combination of the substitution effect and the income
effect?
A) Ceteris paribus. B) Market demand.
C) Downward sloping demand curves. D) Equilibrium price.
Answer: C
3
, 17) Which of the following is explained by the combination of the substitution effect and the income
effect?
A) Equilibrium price.
B) The inverse relationship between price and quantity demanded.
C) Market demand.
D) The direct relationship between price and quantity demanded.
Answer: B
18) What is supply?
A) The total demand for a product by all consumers.
B) The quantity which prevails at the equilibrium price.
C) The quantities which producers are both willing and able to sell per period of time at various
prices.
D) The quantity sold at a certain price.
Answer: C
19) What is the term for a table showing the various quantities supplied per period of time at different
prices?
A) Supply schedule. B) Demand schedule.
C) Market supply. D) Price schedule.
Answer: A
20) What is the term for a change in the amounts that a producer is willing and able to make available as
a result of a price change?
A) Change in the individual supply. B) Change in the market demand.
C) Change in the market supply. D) Change in the quantity supplied.
Answer: D
21) What is the term for the quantities which producers are willing and able to sell per period of time at
various prices?
A) Quantity demanded.
B) Surplus.
C) Quantity supplied.
D) Supply.
E) Product availability.
Answer: D
22) What is supply?
A) The quantities that producers are willing and able to sell per period of time at various prices.
B) The total quantity of goods produced but not sold.
C) The maximum possible quantity that producers could make available.
D) The quantity made available by a typical producer.
Answer: A
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