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Homework answers / question archive / Virginia Tech EC 201 EC201 Chapter 3 Practice Quiz 1)The goals of market participants include the maximization of: A) Utility, profits, and the general welfare of society
Virginia Tech
EC 201
EC201 Chapter 3 Practice Quiz
1)The goals of market participants include the maximization of: A) Utility, profits, and the general welfare of society.
B) Rent, wages, profit, and interest.
C) Land, labor, capital, and entrepreneurship.
D) Resource constraints, budget constraints, and legal constraints.
2. A factor market is any place where:
A) Finished goods are bought and sold. C) Land, labor, or capital is bought and sold.
B) Finished services are bought and sold. D) Armed services are bought and sold.
3. Which of the following is purchased in a product market?
a. A box of doughnuts. C) Undeveloped farmland in Texas.
b. Crude oil. D) All of the above.
4. Which of the following statements about markets is true?
a. Every market has a physical location.
b. Every market has either a demand side or a supply side but not both. C) Every market transaction involves an exchange of dollars.
D) All of the above.
5. The most desired goods or services that are given up when a choice is made is called the:
a. Rationing device. B) Economic profit. C) Opportunity cost. D) Utility cost.
6. According to the law of demand, the quantity of a good demanded in a given time period:
a. Increases as its price rises, ceteris paribus. C) Increases as its price falls, ceteris paribus.
b. Decreases as its price falls, ceteris paribus. D) Does not change when price changes.
7. Ceteris paribus, if the price of a digital camera rises, then we can expect:
a. An increase in the demand for digital cameras.
b. An increase in the quantity demanded of digital cameras.
c. A decrease in the demand for digital cameras.
d. A decrease in the quantity demanded of digital cameras.
8. Which of the following is not held constant along a given demand curve for a good?
a. Price. B) Consumer's income. C) The price of substitutes. D) Consumer tastes.
9. Assume Pepsi and Coke are substitutes. An increase in the price of one will result in:
a. A decrease in demand for the other.
b. A decrease in the quantity demanded of the other. C) An increase in the demand for the other.
D) An increase in the quantity demanded of the other.
10. Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of candles?
a. An improvement in candle-making technology.
b. An increase in the cost of candle wicks. C) An increase in the price of candles.
D) An increase in the number of sellers of candles.
11.. Which of the following provides an example of the law of supply?
A) Falling labor costs cause an increase in supply.
B) Improved technology shifts the supply curve to the right.
C) Some producers leave the industry, and the supply curve shifts to the left. D) Price falls and the quantity supplied decreases.
12. The equilibrium price in a market is found where:
A) The market supply curve intersects the market demand curve.
B) The market supply curve intersects the y-axis.
C) The market demand curve intersects the y-axis.
D) The market supply curve intersects the x-axis.
13. If there is no shortage or surplus at a given price, then:
A) The price must be the equilibrium price. C) An increase in supply must occur.
B) The market mechanism has failed. D) An increase in demand must occur.
14. If there is a shortage at a given price, then:
A) That price is the equilibrium price.
B) That price is greater than the equilibrium price. C) That price is less than the equilibrium price.
D) There is no equilibrium price in the market.
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