1. A market is defined as A) a physical place where people buy only goods. B) a physical place where people buy both goods and services. C) a store where people buy physical goods. D) any arrangement that brings buyers and sellers together. E) a place where one good is bartered for another.

2. Which of the following are examples of a market? i. the New York Stock Exchange ii. a used car lot iii. a website selling vacations to Disney World A) i, ii and iii B) i only C) iii only D) i and iii only E) ii and iii only.

3. Which of the following statements is true about a competitive market? A competitive market A) must have a physical location. B) includes markets for goods and services but not for inputs. C) has so many buyers and sellers that no one can influence the price. D) has one seller competing to sell his or her product. E) has a handful of sellers but always has many buyers.

4. What is the "quantity demanded"? A) the amount of a good people desire B) the amount of a good people are able and willing to buy during a specific time period and at a given price C) the amount of a good people are able and willing to buy at all possible prices D) the maximum amount of a good that can be consumed during a specific time period E) the minimum amount of a good that people are willing to buy during a specific time period and at a given price.

5. The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises, A) the demand curve shifts rightward. B) the demand curve shifts leftward. C) there is a movement down along the demand curve to a larger quantity demanded. D) there is a movement up along the demand curve to a smaller quantity demanded. E) the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded.

6. The law of demand refers to how A) demand changes when people's incomes change. B) demand changes when the prices of substitutes and complements change. C) the quantity demanded changes when the price of the good changes. D) the price of the good changes when people's demand for the good changes. E) the quantity demanded changes when the demand for the good changes.

7. Gasoline prices increase by 50 percent and other things remain the same. As a result, there is A) an increase in the demand for gasoline. B) a decrease in the demand for gasoline. C) no change in the quantity of gasoline demanded. D) a decrease in the quantity of gasoline demanded. E) More information is needed to determine if the demand for gasoline increases or decreases.

8. The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk. As a result, A) the demand for milk increases. B) the quantity demanded of milk increases. C) the price of milk falls to encourage people to drink more milk. D) the demand for milk is not affected. E) the demand for milk decreases because the price of milk rises.

9. The phrase "a change in demand" refers to a A) movement along a demand curve. B) movement along the price curve. C) change in the quantity demanded of a good. D) shift of the demand curve. E) movement along the quantity curve.

10. When demand increases, A) consumers are willing to buy more at any price. B) consumers buy more of the good only if its price falls. C) the price is lower at any level of quantity demanded. D) consumers buy more of the good only if its price rises. E) the demand curve shifts leftward.

11. A change in the demand for apples could result from any of the following EXCEPT A) a change in the number of buyers. B) increased preferences for fresh fruit consumption for health reasons. C) a change in the price of an apple. D) a change in the price of a banana. E) a change in income.

12. Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the A) demand for Dell computers increases. B) demand for Apple computers increases. C) demand for Apple computers decreases. D) supply of Dell computers increases. E) demand for Dell computers decreases.

13. Which of the following shifts the demand curve for movies leftward? A) a decrease in the price of Netflix, a substitute for movies B) a decrease in the price of movie tickets C) an increase in the price of movie tickets D) an increase in movie star salaries E) an increase in incomes, assuming movies are a normal good

14. Car insurance and cars are complements. If the price of car insurance increases, the A) demand for cars decreases. B) demand for cars increases. C) quantity of cars demanded decreases. D) quantity of cars demanded increases. E) More information is needed to determine if the demand increases or decreases.

15. The law of supply states that, other things remaining the same, A) demand increases when supply increases. B) if the price of a good increases, firms buy less of it. C) if the price of a good increases, the quantity supplied increases. D) as people's income increase, the supply of goods increases. E) if the price of a good increases, the supply increases

16. The supply schedule: A) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans remain the same. B) is a curve showing the relationship between the amount the sellers are willing and able to sell and the price of that good when all relevant factors change. C) shows one quantity at one price. D) is the schedule that suppliers have to keep or else they will be late. E) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans change.

17. Which of the following results in a movement upward along the supply curve for movies in theaters? A) an increase in the price of movie tickets B) a decrease in the price of movie tickets C) a decrease in the price of downloaded movies D) a decrease in movie star salaries E) an increase in the number of theaters

18. Which of the following increases the quantity supplied of yoga pants but does NOT increase the supply of yoga pants? A) a decrease in the price of a yoga pants B) an increase in the price of a yoga pants C) a decrease in the number of suppliers of yoga pants D) an increase in the price of the resources used to produce yoga pants E) new technology that lowers the cost of producing yoga pants

19. Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough A) increases the demand for hybrid corn. B) increases the supply of hybrid corn. C) decreases the supply of hybrid corn. D) Both answers A and C are correct. E) Both answers A and B are correct.

20. The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________. A) increases; shifts rightward B) increases; shifts leftward C) decrease; shifts rightward D) decreases; shifts leftward E) increases; does not shift

Question 21 and 23 based on Figure 1. Price (dollars per pizza) Quantity (millions of pizzas per year) Figure 1 21. In the above figure, the movement from point a to point b reflects A) an increase in the price of pizza. Bj an increase in the supply of pizza. C) an increase in the number of producers of pizza. D) a decrease in the cost of the tomato sauce used to produce pizza. E) a decrease in income if pizza is a normal good. 22. In the above figure, the shift in the supply curve from S to S1 reflects A) an increase in the quantity of pizza supplied. Bj a decrease in the quantity of pizza supplied. C) an increase in the supply of pizza D) a decrease in the supply of pizza. E) None of the above answers is correct. 23. In the above figure, the shift in the supply curve from S to S, reflects Aj an increase in the quantity of pizza supplied. Bj a decrease in the quantity of pizza supplied. C) an increase in the supply of pizza. D) a decrease in the supply of pizza. E) a decrease in the supply of pizza AND a simultaneous decrease in the quantity of pizza supplied.Question 27 and 28 based on Table 1. Price Quantity Quantity Idollars per demanded supplied cellular phone) (thousands) (thousands) 100 80 50 100 40 Table 1 27. Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone is A) 50,000 and $100. B) 80,000 and $80. C) 60,000 and $50. D) 40,000 and $20. E) 100,000 and $20. 28. Using the data in the table above, at the price of $80 a phone, A) a shortage of 25,000 cellular telephones occurs. B) a surplus of 80,000 cellular telephones occurs. C) a surplus of 25,000 cellular telephones occurs. D) a shortage of 55,000 cellular telephones occurs. E) the market is in equilibrium. 29. If a market begins in equilibrium and then the demand curve shifts leftward, a A) shortage is created, which is eliminated by a fall in price. Bj shortage is created, which is eliminated by a rise in price. C) surplus is created, which is eliminated by a fall in price. D) surplus is created, which is eliminated by a rise in price. E) surplus is created, which is eliminated by the supply curve shifting leftward 30. Suppose that people decide riding scooters is no longer fun. The equilibrium price of a scooter _ and the equilibrium quantity of scooters A) rises; increases Bj rises; decreases C) falls; increases D) falls; decreases E) does not change; decreases