Question 1

Demand is the quantity of a product per time period that buyers will buy at the prevailing price,other things equal

Accepted Answer

The answer of Demand is the quantity of a product...

Question 2

An increase in the demand for gasoline accompanied by a decrease in the supply of gasoline will cause the price to rise,but may cause the quantity purchased to increase,decrease,or remain the same

Accepted Answer

When demand for gasoline increases, it will lead to an increase in the price of gasoline. However, if the supply of gasoline decreases, it may result in either a decrease in the quantity purchased due to scarcity or an increase in the quantity purchased due to panic buying or hoarding, depending on the severity of the supply shortage and consumer behavior. Therefore, it is possible for the quantity purchased to either increase, decrease, or remain the same.

Question 3

The Law of Demand states that consumers will buy less at lower prices,but only if a number of other things are held constant

Accepted Answer

The Law of Demand states that consumers will buy more of a good at lower prices and less at higher prices, assuming all other factors remain constant.

Question 4

An increase in the supply of a good will increase demand for the good

Accepted Answer

An increase in the supply of a good will typically lead to a decrease in price, which in turn might lead to an increase in the quantity demanded, but not necessarily to an increase in demand. Demand is determined by factors such as consumer preferences, income levels, and the availability of substitutes, and is not directly affected by changes in supply.

Question 5

Entry is blocked in monopoly markets

Accepted Answer

In a monopoly market, there is only one provider of a good or service, which means that entry is often blocked by barriers such as high startup costs or government regulations.

Question 6

Fluctuating prices tend to confuse consumers,so prices should be government controlled whenever possible

Accepted Answer

Fluctuating prices are a natural aspect of a market economy and are influenced by various factors such as supply and demand, production costs, and competition. Government control of prices can lead to market inefficiencies and unintended consequences such as shortages, surpluses, and reduced competition. Additionally, consumers may not always benefit from government-controlled prices as they may not reflect the true value or costs of goods and services. Overall, government control of prices is generally not recommended except in certain cases where it is necessary to protect consumers from exploitative practices.

Question 7

An increase in the price of a good will decrease demand for the good

Accepted Answer

An increase in the price of a good will decrease the quantity demanded for the good, not the demand itself. Demand refers to the entire relationship between price and the quantity of a good that consumers are willing to purchase at each price level, whereas quantity demanded refers to the amount of a good consumers are willing to buy at a specific price.

Question 8

During December each year,the number of Christmas trees sold increases,as does the price of the trees.This clearly violates the Law of Demand

Accepted Answer

The statement is incorrect. The Law of Demand states that as the price of a good or service increases, the demand for it decreases, and vice versa. However, in the case of Christmas trees, the demand increases during December due to the holiday season, which leads to an increase in price. This is a case of a shift in demand, rather than a violation of the Law of Demand.

Question 9

When an economist says that the demand for a product has increased,this means that consumers are now willing to purchase more of the product at each alternative price

Accepted Answer

When the demand for a product increases, it means that consumers are willing to purchase more of the product at each alternative price. This leads to a shift in the demand curve to the right, indicating a higher quantity demanded at all price levels.

Question 10

The Law of Supply states that sellers will sell more at high prices than at low prices

Accepted Answer

The answer of The Law of Supply states that sellers...

Question 11

A change in the price of automobiles will cause a change in the demand for automobiles

Accepted Answer

A change in the price of automobiles will cause a change in the quantity demanded, not in the demand itself. Demand refers to the willingness and ability of consumers to purchase goods at different prices, which is represented by the demand curve. A movement along the demand curve due to a price change is called a change in quantity demanded, not a change in demand. Changes in demand are caused by factors other than the price of the good itself, such as changes in consumer income, preferences, or prices of related goods.

Question 12

When the entire demand curve shifts out to the right,we say there has been an increase in demand

Accepted Answer

When the demand curve shifts outwards to the right, it means that at any given price, consumers are willing and able to buy more of the product than before. This indicates an increase in demand.

Question 13

Blocked entry is essential for a purely competitive market

Accepted Answer

In a purely competitive market, there are no barriers to entry, meaning new firms can enter the market freely.

Question 14

For a market to be considered purely competitive,new rivals must be free to enter if they feel they can effectively compete

Accepted Answer

In a perfectly competitive market, there are no barriers to entry, which means that new firms are free to enter the market and compete. This promotes competition and helps to ensure that prices are set at a level that reflects supply and demand. If new rivals are prevented from entering the market, then it cannot be considered purely competitive.

Question 15

An increase in the price of gas will cause an increase in the supply of gas since it will be more profitable to sell

Accepted Answer

An increase in the price of gas would cause a decrease in the supply of gas as producers would be incentivized to sell a smaller quantity at a higher price, rather than a larger quantity at a lower price.

Question 16

An increase in consumer income can either increase or decrease demand for a good

Accepted Answer

An increase in consumer income can increase demand for a normal good, but it can decrease demand for an inferior good.

Question 17

A change in supply occurs when one of the other things equal changes and is represented as movement along the supply curve

Accepted Answer

A change in supply occurs when factors that influence production costs or processes such as technology, input prices, taxes, or regulations change, causing a shift in the entire supply curve, not just movement along it.

Question 18

Surpluses tend to drive competitive prices downward toward equilibrium,and shortages tend to drive competitive prices upward toward equilibrium

Accepted Answer

This statement is true, as the basic principles of supply and demand state that when there is a surplus of goods or services, sellers need to lower prices in order to attract buyers and clear their inventory. Similarly, when there is a shortage, buyers are willing to pay more to obtain the product, which drives prices up toward equilibrium.

Question 19

The demand curve for an inferior good is upward sloping,like a typical supply curve

Accepted Answer

An inferior good is one for which demand decreases as income increases. Therefore, the demand curve for an inferior good will be downward sloping, not upward sloping like a typical supply curve.

Question 20

In response to an increase in the price of beer,Bob reduces his consumption from 3 to 2 beers per day.This

Accepted Answer

The answer of In response to an increase in the...

Quiz 2: Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition