Chap 4

A perfectly competitive market has ________.

• only one seller

• at least a few sellers

• many buyers and sellers

• firms that set their own prices

• none of the answer choices

If an increase in the price of chicken leads to an increase in the demand for fish, then chicken and fish are ________.

• substitutes

• complements

• normal goods

• inferior goods

• none of the answer choices

The law of demand states that an increase in the price of a good ________.

• increases the supply of that good

• decreases the quantity demanded for that good

• does none of the answer choices

• decreases the demand for that good

• increases the quantity supplied of that good

The law of supply states that an increase in the price of a good ________.

• decreases the quantity demanded for that good

• increases the quantity supplied of that good

• increases the supply of that good

• does none of the answer choices

• decreases the demand for that good

If an increase in consumer incomes leads to a decrease in the demand for hamburger, then hamburger is ________.

• a complementary good

• a substitute good

• a normal good

• an inferior good

• none of the answer choices

A monopolistic market has ________.

• only one seller

• at least a few sellers

• many buyers and sellers

• firms that are price takers

• none of the answer choices

Which of the following shifts the demand for pizza to the right?

• A decrease in the price of pizza

• A decrease in consumer incomes if pizza is a normal good

• A decrease in the price of soda if soda and pizza are complements

• An increase in the price of pizza

• None of the answer choices

All of the following shift the supply of smartphones to the right except ________.

• an increase in the price of smartphones

• an advance in the technology used to manufacture smartphone

• a decrease in the wage of workers employed to manufacture smartphones

• manufacturers' expectations of lower smartphone prices in the future

• all of the answer choices cause an increase in the supply of smartphones

If the price of a good is above the equilibrium price, ________.

• the quantity demanded is equal to the quantity supplied and the price remains unchanged

• there is a shortage and the price will rise

• there is a shortage and the price will fall

• there is a surplus and the price will fall

• there is a surplus and the price will rise

If the price of a good is below the equilibrium price, ________.

• the quantity demanded is equal to the quantity supplied and the price remains unchanged

• there is a shortage and the price will rise

• there is a surplus and the price will fall

• there is a shortage and the price will fall

• there is a surplus and the price will rise