Econ Quiz March 3rd - Perfectly Competitive Markets & Demand

What is the central topic of microeconomics?

• the interaction of supply and demand
• the relationship between interest rates and inflation
• changes in gross domestic product
• the overall performance of the economy
• shifts in aggregate demand and aggregate supply

A market consists of all

• buyers of a good
• sellers of a good
• buyers and sellers of a particular good
• buyers and sellers in the economy
• companies in a specific industry

Which of the following characteristics is NOT present in a perfectly competitive market?

• There are a large number of sellers.
• Buyers are well informed about the market price.
• Sellers have market power.
• No single buyer can influence the price.
• The good is standardized.

The BEST example of a perfectly competitive market is the market for

• gasoline
• cereal
• tennis shoes
• electricity
• cell phones

What is the law of demand?

• Demand shifts to the right when more buyers enter the market.
• Quantity demanded rises as income rises.
• Quantity demanded falls as a good’s price rises.
• Demand shifts to the left as a good’s price rises.
• Quantity demanded falls as a substitute good’s price falls.

To which economic concept is the law of demand MOST directly related?

• opportunity cost
• rationality
• gains from trade
• scarcity
• Pareto efficiency

The table that shows the quantity demanded at each price is called the

• equilibrium calendar
• price bulletin
• demand schedule
• own-price graph
• market table

Goods for which quantity demanded falls as income rises are called

• inferior goods
• luxury goods
• complementary goods
• normal goods
• substitute goods

If the decline in the price of one good causes a decrease in quantity demanded of another good, these goods are considered

• luxuries
• substitutes
• necessities
• complements
• normal

Which of the following pairs of goods are substitutes?

• pencils and notebooks
• tea and coffee
• automobile insurance and cars
• movies and popcorn
• peanut butter and jelly