1. The Law of Demand states that: A. Consumers buy a good based on many other fa

Question

1. The Law of Demand states that:
A. Consumers buy a good based on many other factors other than the price of the good
B. Consumers buy less of a good as its price increases and more of a good as its price decreases
C. Firms produce more of a good as its price increases and less of a good as its price decreases
D. Consumers buy more of a good when their income rises and less of a good when their income decreases

2. What does the term "quantity demanded" refer to?
A. It refers to both the amount of a good that consumers want to buy at a specified price and the amount that suppliers want to sell at that specified price
B. It refers to the demand for a good over a specified time period
C. It refers to the number of a good available for purchase at a specified price
D. It refers to the amount of a good that consumers want to purchase at a specified price

3. In general, demand curves have a:
A. Negative slope because consumers buy less of a good as its price rises
B. Negative slope because more of a good becomes available as its price falls
C. Positive slope because consumers value a good more if its price rises
D. Positive slope because price and quantity demanded move in opposite directions

4. What does the term "demand" refer to?
A. It refers to the total quantity of a good available for purchase at various prices
B. It refers to the total quantity of a good that consumers want to buy at a specified price over a given time period
C. It refers to the relationship between various prices and the quantities that consumers want to buy at these various prices over a given time period
D. It refers to the positive relationship between price and the quantity that consumers want to buy

5. Which of the following best exemplifies the Law of Demand?
A. AT&T Wireless Services laid off 70% of its IT staff as it outsourced some of its information technology work to lower-cost operations overseas
B. High gasoline prices have increased the demand for public transportation
C. Health conscious consumers are purchasing more and more organic produce
D. Steep discounts in the price of digital cameras have contributed to increased sales

6. How does one derive the market demand for root beer?
A. The market demand for root beer is calculated by taking the product of the average quantity demanded by consumers and the average price of root beer over a given time period
B. The market demand for root beer is calculated by summing up the individual quantities demanded at each price
C. The market demand for root beer is derived by calculating the total sales over a specified time period
D. The market demand for root beer is calculated by summing up the individual quantities demanded over a range of prices

7. A demand curve shows the relationship between price and quantity demanded, ceteris paribus. What does "ceteris paribus" mean?
A. It means there are many other factors other than price and quantity that affect demand
B. It is the Latin phrase for "over a given time period"
C. It means that there are many other factors besides the price that affect demand
D. It means all other factors that affect demand other than price are held constant

9. Studies have shown that olive oil, which is high in antioxidants, may help prevent breast cancer and colon cancer. Which of the following shifts best describes the effect of this information in the market for olive oil?
A. The supply curve shifts to the right
B. The demand curve shifts to the left
C. The demand curve shifts to the right
D. The supply curve shifts to the left

10. If an increase in the price of rice causes an increase in demand for pinto beans, then rice and pinto beans are:
A. Complementary goods
B. Substitute goods
C. Inferior goods
D. Normal goods

11. Wal-Mart found that at its new, upscale store in Plano, Texas

Explanation / Answer

1.B

2.D

3A

4B

5D

6B

7D

9C

10B

11A

12C

13A

14D

17D

20D

21A

22D

23A

24B

25C

27C

28B

29C

31B

after 31 the figure is not visible.....

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