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1、Chapter4TheMarketForcesofSupplyandDemandTRUEFALSE1. Pricesallocateamarketeconomysscarceresources.ANS:TDIF:1REF:4-0NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketeconomiesMSC:Definitional2. Inamarketeconomy,supplyanddemanddetermineboththequantityofeachgoodproducedandthepriceatwhichit
2、issold.ANS:TDIF:1REF:4-0NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketeconomiesMSC:Definitional3. Amarketisagroupofbuyersandsellersofaparticulargoodorservice.ANS:TDIF:1REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketsMSC:Definitional4. Sellersasagroupdetermin
3、ethedemandforaproduct,andbuyersasagroupdeterminethesupplyofaproduct.ANS:FDIF:1REF:4-1NAT:AnalyticLOC:SupplyanddemandTOP:DemandSupplyMSC:Definitional5. Ayardsaleisanexampleofamarket.ANS:TDIF:2REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketsMSC:Applicative6. Anewspaper,sclassif
4、iedadsareanexampleofamarket.ANS:TDIF:2REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketsMSC:Applicative7. Mostmarketsintheeconomyarehighlycompetitive.ANS:TDIF:1REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:MarketsMSC:Definitional8. Inacompetitivemarket,thequa
5、ntityofeachgdproducedandthepriceatwhichitissoldarenotdeterminedbyanysinglebuyerorseller.ANS:TDIF:1REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:CompetitivemarketsMSC:Definitional9. Inacompetitivemarket,therearesofewbuyersandsofewsellersthateachhasasignificantimpactonthemarketprice
6、.ANS:FDIF:1REF:4-1NAT:AnalyticLOC:Markets,marketfailure,andexternalitiesTOP:CompetitivemarketsMSC:Definitional10. Inaperfectlycompetitivemarket,thegoodsofferedforsaleareallexactlythesame.ANS:TDIF:1REF:4-1NAT:AnalyticLOC:PerfectcompetitionTOP:PerfectcompetitionMSC:Definitional11. Inaperfectlycompetit
7、ivemarket,buyersandsellersarepricesetters.ANS:FDIF:1REF:4-1NAT:AnalyticLOC:PerfectcompetitionTOP:PerfectcompetitionMSC:Definitional12.Allgoodsandservicesaresoldinperfectlycompetitivemarkets.ANS:FDIF:1REF:4-1NAT:AnalyticLOC:PerfectcompetitionMSC:DefinitionalTOP:Perfectcompetition13.Ifagoodorserviceha
8、sonlyoneseller,thentheselleriscalledaANS:TDIF:1REF:4-1NAT:AnalyticLOC:MonopolyTOP:Monopolymonopoly.MSC:Definitional14.Monopolistsarepricetakers.ANS:FDIF:2REF:4-1NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive15.LocalcableTVcompaniesfrequentlyaremonopolists.ANS:TDIF:1REF:4-1NAT:AnalyticLOC:Monop
9、olyTOP:MonopolyMSC:Definitional16.Thequantitydemandedofaproductistheamountthatbuyersanprice.ANS:TDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandMSC:Definitional3willingandabletopurchaseataparticularTOP:Quantitydemanded17.Thelawofdemandistrueformostgoodsintheeconomy.ANS:TDIF:1REF:4-2NAT:AnalyticLOC:Suppl
10、yanddemandMSC:DefinitionalTOP:Lawofdemand18. Thelawofdemandstatesthat,otherthingsequal,whenthepriceofagoodrises,thequantitydemandedofthegoodrises,andwhenthepricefalls,thequantitydemandedfalls.ANS:FDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:LawofdemandMSC:Definitional19. Thedemandcurveistheupward
11、-slopinglinerelatingpriceandquantitydemanded.ANS:FDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:Demandcu,eMSC:Definitional20. Individualdemandcun,esaresummedhorizontallytoobtainthemarketdemandcurve.ANS:TDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:MarketdemandcurveMSC:Definitional21. Themarketdem
12、andcurveshowshowthetotalquantitydemandedofagoodvariesastheincomeofbuyersvaries,whilealltheotherfactorsthataffecthowmuchconsumerswanttobuyareheldconstant.ANS:FDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:MarketdemandcurveMSC:Definitional22. Ifsomethinghappenstoalterthequantitydemandedatanygivenpric
13、e,thenthedemandcurveshifts.ANS:TDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:Demandcur,eMSC:Definitional23. Amovementupwardandtotheleftalongagivendemandcurveiscalledadecreaseindemand.ANS:FDIF:2REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:Demandcur,eMSC:Interpretive24. Anincreaseindemandshiftsthedeman
14、dcurvetotheleft.ANS:FDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:Demandcur,eMSC:Definitional25. Ifthedemandforagoodfallswhenincomefalls,thenthegoodiscalledaninferiorgood.ANS:FDIF:1REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:NormalgoodsMSC:Definitional26. WhenMariosincomedecreases,hebuysmorepasta.Fo
15、rMario,pastaisanormalgood.ANS:FDIF:2REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:InferiorgoodsMSC:Applicative27. Adecreaseinincomewillshiftthedemandcurveforaninferiorgoodtotheright.ANS:IDIF:2REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP:InferiorgoodsMSC:Interpretive28. Anincreaseinthepriceofasubstitutegoodwillshiftthedemandcurveforagoodtotheright.ANS:TDIF:2REF:4-2NAT:AnalyticLOC:SupplyanddemandTOP