____ 1. The law of demand states that there is a tendency for

a. Quantity demanded to be higher when price is higher.

b.Quantity demanded to be higher when price is lower.

c.Quantity demanded to be lower when price is lower.

d.Quantity demanded to not respond when price changes.

____ 3. The main purpose of the model of supply and demand is to explain

a.Supply.

b.Demand.

c.Prices.

d.Quantities.

____ 4. What will happen in the soup market if our economy goes into a recession and incomes fall, assuming soup is an inferior good?

a.The demand for soup will rise.

b.Demand for soup will fall.

c.The supply of soup will rise.

d.The supply of soup will fall.

____ 7. When you buy a smartphone, that phone becomes more valuable to you as more people also get smartphones.What do economists call this phenomenon?

a.Network effects.

b.Congestion effects.

c.The Law of Demand.

d.The Ceteris Paribus phenomenon.

____ 8. According to Stevenson and Wolfers, which company benefits when our economy goes into a recession?

a.Walmart, because they sell normal goods.

b.Target, because they sell normal goods.

c.Target, because they sell inferior goods.

d.Walmart, because they sell inferior goods.

____ 9. In every chapter of your textbook, there is a summary of the entire chapter.You can find this summary in Achieve by clicking on what link?

a.The Index.

b.The Glossary.

c.The Chapter Introduction.

d.The Chapter at a Glance.

____ 10. The Rational Rule for buyers says that you should keep purchasing a product as long as

a.The price is greater than the marginal cost.

b.The price is less than the marginal cost.

c.The price is greater than the marginal benefit.

d.The price is less than the marginal benefit.