microeconomics chapter 2

What is the definition of a market?

• A group of buyers and sellers of a particular good or service

• A highly organized place where goods are exchanged

• A group of people who want to buy the same product

• A store that sells a variety of products

What does the "law of demand" state?

• As the price of a good rises, the quantity demanded rises

• As the price of a good rises, the quantity supplied rises

• Other things being equal, when the price of a good rises, the quantity demanded falls

• Other things being equal, when the price of a good falls, the quantity demanded also falls

What is a "perfectly competitive market"?

• A market with many sellers but few buyers

• A market where sellers have a significant impact on the market price

• A market with one seller who sets the price, known as a monopoly

• A market with so many buyers and sellers that each has a negligible impact on the market price

In a perfectly competitive market, what are buyers and sellers called?

• Price makers

• Price setters

• Price takers

• Price adjusters

What is the "demand curve"?

• A graph showing the relationship between price and quantity supplied

• A table showing the quantity demanded at each price

• A graph that illustrates how the quantity demanded of a good changes as its price varies

• A graph that always slopes upward

The demand curve slopes downward because...

• A lower price increases the quantity demanded

• A higher price increases the quantity demanded

• Technology reduces the amount of labor needed to make a product

• There is a surplus in the market

What is "market demand"?

• The demand for a product from a single buyer

• The demand for all products in an economy

• The sum of all the individual demands for a particular good or service

• The quantity demanded at the equilibrium price

An "increase in demand" is represented by a shift of the demand curve to the...

• Right

• Left

• Upward

• Downward

Which of the following would NOT cause a shift in the demand curve?

• A change in income

• A change in the price of a related good

• A change in the price of the good itself

• A change in tastes

What are two goods called when a fall in the price of one good raises the demand for the other good?

• Substitutes

• Complements

• Normal goods

• Inferior goods