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Table 3-1  QUANITY  QUANTITY  DEMANDED  SUPPLID  PRICE  (units per week)   (units per week)   R100 1000100 R150 900300 R200 800500 R250 600600 R300 300650\begin{array} { | l | l | l | } \hline & \text { QUANITY } & \text { QUANTITY } \\\hline & \text { DEMANDED } & \text { SUPPLID } \\\hline \text { PRICE } & \text { (units per week) } & \text { (units per week) } \\\hline \text { R100 } & 1000 & 100 \\\hline \text { R150 } & 900 & 300 \\\hline \text { R200 } & 800 & 500 \\\hline \text { R250 } & 600 & 600 \\\hline \text { R300 } & 300 & 650 \\\hline\end{array} -Refer to Table 3-1. Given this data, if the price of CD players is R200,


A) there will be a surplus.
B) there will be a shortage.
C) the market is in equilibrium.
D) the supply will increase.

E) None of the above
F) B) and C)

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Explain why the relationship between price and quantity demanded is known as the 'law of demand'.

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There is a relationship between prices a...

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The commercial airliner industry, consisting of Boeing and Airbus, represents


A) perfect competition.
B) oligopoly.
C) monopoly.
D) None of the above are correct.

E) A) and D)
F) B) and D)

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Because there are many buyers and sellers in a perfectly competitive market, neither has any power to influence price. They are said to be price takers.

A) True
B) False

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The amount of a good or service that buyers would be willing and able to purchase at a specific price is known as


A) quantity demanded.
B) demand.
C) supply.
D) quantity supplied.

E) A) and C)
F) B) and C)

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A perfectly competitive market has


A) only one seller.
B) many buyers and sellers.
C) a few dominant sellers.
D) at least a few sellers.

E) All of the above
F) B) and D)

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A group of buyers and sellers with the potential to trade is known as


A) a cartel.
B) a market.
C) an industry.
D) a sector.

E) A) and B)
F) A) and C)

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If pencils and paper are complements, an increase in the price of pencils causes the demand for paper to decrease or shift to the left.

A) True
B) False

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

A) True
B) False

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


A) increases the supply of that good.
B) decreases the quantity demanded for that good.
C) decreases the demand for that good.
D) increases the quantity supplied of that good.

E) B) and D)
F) All of the above

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What determines the degree of competitiveness in a market?

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A more competitive market will have a la...

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Table 3-1  QUANITY  QUANTITY  DEMANDED  SUPPLID  PRICE  (units per week)   (units per week)   R100 1000100 R150 900300 R200 800500 R250 600600 R300 300650\begin{array} { | l | l | l | } \hline & \text { QUANITY } & \text { QUANTITY } \\\hline & \text { DEMANDED } & \text { SUPPLID } \\\hline \text { PRICE } & \text { (units per week) } & \text { (units per week) } \\\hline \text { R100 } & 1000 & 100 \\\hline \text { R150 } & 900 & 300 \\\hline \text { R200 } & 800 & 500 \\\hline \text { R250 } & 600 & 600 \\\hline \text { R300 } & 300 & 650 \\\hline\end{array} -Refer to Table 3-1. Given this data, the equilibrium price and quantity of CD players are


A) R150 and 300 players.
B) R200 and 800 players.
C) R250 and 600 players.
D) R300 and 650 players.

E) B) and C)
F) All of the above

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


A) An increase in the price of watches.
B) A change in the cost of producing watches.
C) A decrease in the price of watch batteries if watch batteries and watches are complements.
D) A decrease in consumer incomes if watches are a normal good.
E) A decrease in the price of watches.

F) All of the above
G) C) and E)

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A decrease (leftward shift) in the supply of a good will tend to cause


A) an increase in the equilibrium price and quantity.
B) a decrease in the equilibrium price and an increase in the equilibrium quantity.
C) a shift in the demand curve to the left.
D) a decrease in the equilibrium price and quantity.
E) an increase in the equilibrium price and a decrease in the equilibrium quantity.

F) A) and C)
G) None of the above

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The discovery of new gold in South Africa will __________ the price of gold and __________ the quantity of gold traded.


A) raise; raise
B) lower; raise
C) raise; lower
D) lower; lower

E) A) and B)
F) B) and C)

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Explain the difference between these two statements. a. A rise in price leads to a decrease in quantity demanded. b. A rise in price is caused by an increase in demand.

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a. The law of demand states that if pric...

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Suppose there is an increase in both the supply and demand for laptops. Further, suppose the supply of laptops increases more than demand for laptops. In the market for laptops, we would expect


A) the change in the equilibrium quantity to be ambiguous and the equilibrium price to fall.
B) the equilibrium quantity to rise and the equilibrium price to rise.
C) the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.
D) the equilibrium quantity to rise and the equilibrium price to fall.
E) the equilibrium quantity to rise and the equilibrium price to remain constant.

F) A) and B)
G) C) and D)

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