tut 2

Which of the following statements is correct?

• Buyers determine supply and sellers determine demand.

• Buyers determine demand and sellers determine supply.

• Buyers determine both demand and supply.

• Sellers determine both demand and supply.

For a competitive market, which of the following statements is correct?

• A seller can always increase her profit by raising the price of her product.

• If a seller charges more than the going price, buyers will go elsewhere to make their purchases.

• A seller often charges less than the going price to increase sales and profit.

• A single buyer can influence the price of the product, but only when purchasing from several sellers in a short period of time.

Which of the following demonstrates the law of demand?

• After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise.

Refer to Table 4-1. For whom is the good a normal good?

• Aaron

• Austin

• all of the four demanders

• This cannot be determined from the table.

If something happens to alter the quantity demanded at any given price, then

• the demand curve becomes steeper.

• the demand curve becomes flatter.

• the demand curve shifts.

• we move along the demand curve.

You lose your job and, as a result, you buy fewer romance novels. This shows that you consider romance novels to be a(n):

• luxury good

• inferior good

• normal good

• complementary good

Today's demand curve for gasoline could shift in response to:

• a change in today's price of gasoline.

• a change in the expected future price of gasoline.

• a change in the number of sellers of gasoline.

• All of the above are correct.

Refer to Figure 4-4. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

• The price of marijuana, a complement to cigarettes, increased.

• Mandatory health warnings were placed on cigarette packages.

• Several foreign countries banned U.S. cigarettes in their countries.

• A tax was placed on cigarettes.

“Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well.” This relationship between price and quantity supplied:

• is referred to as the law of supply.

• applies only to a few goods in the economy.

• is represented by a downward-sloping supply curve.

• All of the above are correct.

If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is:

• 3 units.

• 11 units.

• 25 units.

• 44 units.