Question

[1] A buyer's demand for a product refers to the amounts of the product the buyer would purchase at different:
A) prices.
B) income levels.
C) points in time.
D) all of the above.

[2] A demand schedule:
A) typically indicates that the quantity of a product demanded increases as its price increases.
B) indicates the amounts of a product a buyer would purchase at different prices in a defined time period.
C) only illustrates buying plans of individuals in households
D) all of the above.

[3] The Law of Demand focuses on changes in the amount of a good or service demanded that are caused by changes in:
A) the price of the good or service.
B) nonprice factors, such as buyer's income, or substitute products.
C) the time period under consideration; for example, a week versus a month.
D) all of the above.

[4] The Law of Demand:
A) indicates how buyers react to changes in all factors affecting their purchasing decisions.
B) is a result of limited incomes and buyers' abilities to substitute one product for another.
C) states that changes in the price of a product and changes in the amount demanded are directly related.
D) all of the above.

[5] One reason buyers demand less of a product as its price increases is:
A) substitute goods are usually available.
B) high-priced goods place buyers in higher tax brackets.
C) buyers must save more of their incomes as prices increase.
D) sellers offer less of the product for sale as its price increases.

[6] Which of the following explains why consumers purchase less of a good or service when its price increases?
A) A limited income from which purchases can be made.
B) The availability of substitute goods or services.
C) Both of the above.
D) None of the above.

[7] Which of the following statements about demand is FALSE?
A) Demand curves are downward sloping.
B) The demand curve for a product will shift to the left as its price rises.
C) The Law of Demand occurs because people's incomes are limited and there are substitute goods available.
D) There is an inverse relationship between the change in a product's price and the change in its quantity demanded.

[8] The Law of Supply states that as the price of a product increases:
A) consumers will buy less of the product.
B) sellers will offer less of the product for sale.
C) sellers will offer more of the product for sale.
D) new buyers will enter the market because the product appears popular.

[9] A supply schedule:
A) is based on a seller's ability to cover costs and earn a profit.
B) indicates there is a direct relationship between a product's price and the quantity supplied.
C) indicates the different amounts of a product that a seller would offer for sale at different prices over a defined time period.
D) all of the above.

[10] A typical supply curve is shown in a graph that has:
A) price on the vertical axis, quantity on the horizontal axis, and the curve is upward sloping.
B) price on the vertical axis, quantity on the horizontal axis, and the curve is downward sloping.
C) quantity on the vertical axis, price on the horizontal axis, and the curve is upward sloping.
D) quantity on the vertical axis, price on the horizontal axis, and the curve is downward sloping.

[11] A surplus occurs in a market when quantity demanded is:
A) equal to quantity supplied.
B) less than quantity supplied.
C) more than quantity supplied.
D) none of the above.

[12] The expected reaction to a surplus is:
A) a reduction in price.
B) an increase in quantity supplied.
C) a reduction in quantity demanded.
D) all of the above.

[13] Equilibrium price and equilibrium quantity are the price and quantity:
A) where demand equals supply in a market.
B) toward which a free market automatically moves.
C) both of the above.
D) none of the above.

[14] A shortage will develop when a product's price is:
A) equal to the equilibrium price.
B) less than the equilibrium price.
C) greater than the equilibrium price.
D) none of the above.

[15] When a product's price is greater than the equilibrium price we should expect:
A) a surplus.
B) a shortage.
C) market supply to equal market demand.
D) none of the above.

Answer 1

1) A buyer's demand for a product refers to the amounts of the product the buyer would purchase at different prices, income levels and different points of time. So option D is the correct answer.

2) A demand schedule indicates the amount of a product buyer would purchase at different prices in a defined time period. So option B is the correct answer.

3) The law of demand focuses on changes in the amount of a good or service demanded that are caused by changes in the price of the good or service. So option A is the correct answer.

4) The Law of Demand states that changes in the price of a product and changes in the amount demanded are directly related. So option C is the correct answer.