Which of the following is NOT a characteristic of a perfectly competitive market?
a.
The goods being offered for sale are all the same.
b.
Buyers and sellers are very numerous.
c.
Buyers and sellers are price takers.
d.
It is difficult for new firms to enter the market.
2.
A market with only one firm is known as a:
a.
complementary market.
b.
monopoly.
c.
perfectly competitive market.
d.
normal market.
3.
An increase in demand means that:
a.
when the price drops consumers are willing to purchase greater quantities of the good.
b.
consumers are willing to purchase greater quantities of the good at any given price.
c.
when the price rises, consumers are willing to purchase greater quantities of the good.
d.
consumers make the price drop by buying greater quantities of the good.
4.
If good B is a substitute for good A, and the price of good B increases:
a.
the quantity demanded of good A will decrease.
b.
the demand for good A will increase.
c.
the price of good A will tend to decrease.
d.
the quantity demanded of good B will increase.
5.
When the price of a good increases:
a.
the quantity supplied of the good will increase.
b.
the quantity supplied of the good will decrease.
c.
the supply curve of the good will shift to the right.
d.
the supply curve of the good will shift to the left.
6.
A new technology that helps firms reduce production costs will cause a:
a.
movement down and to the left along the supply curve.
b.
movement up and to the right along the supply curve.
c.
shift to the right of the supply curve.
d.
shift to the left of the supply curve.
7.
If the price in a market happens to be below equilibrium, there will be a ________ in the market, and the price will tend to ________.
a.
surplus, drop
b.
surplus, rise
c.
shortage, drop
d.
shortage, rise
8.
If the price in a market happens to be above equilibrium, there will be a ________ in the market, and the price will tend to ________.
a.
surplus, drop
b.
surplus, rise
c.
shortage, drop
d.
shortage, rise
9.
Suppose that a scientific study just published demonstrates that eating apples makes people much healthier. How will this affect the equilibrium price and quantity in the market?
a.
The equilibrium price will increase and the equilibrium quantity will decrease.
b.
The equilibrium price will decrease and the equilibrium quantity will increase.
c.
Both the equilibrium quantity and price will increase.
d.
Both the equilibrium quantity and price will decrease.
10.
Suppose the price of corn syrup increases. Given that corn syrup is a major ingredient in the production of soft drinks, how will this affect the equilibrium price and quantity in the soda market?
a.
The equilibrium price will increase and the equilibrium quantity will decrease.
b.
The equilibrium price will decrease and the equilibrium quantity will increase.
c.
Both the equilibrium quantity and price will increase.
d.
Both the equilibrium quantity and price will decrease.
:)
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