1 Which statement ls consistent with the law of demand? 0 A reduction In market price will lead to an Increase in quantity demanded. 0 An increase In market price will lead to an increase In quantity demanded. C) At a zero price. quantity demanded will be equal to zero. 0 A reduction In market price will lead to a decrease in quantity demanded. Which ofthe following characteristics lead to a downward-sloping demand curve? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. D An increase in purchasing power as market price decreases El A decline in the price of a related good D Diminishing marginal utility I] Diminishing preferences for a particular good D Increasing opportunity costs El Increasing marginal benet How is a market demand curve derived from individual demand curves? 0 Use the largest quantity demanded among all consumers for each price 0 Calculate the average quantity demanded among all consumers D Add up prices paid for each unit demanded by Individuals 0 Add up quantities demanded by all individual consumers for each price Critically evaluate: "In comparing the two equilibrium positions in the diagram below. I note that a smaller amount is actually demanded at a lower price. This refutes the law of demand'. G) Price 0 Quantity 1. A decrease in demand from D1 to D2 results in (Clicktu sale V . 2. This causes the price to (Click in sale V . 3. This change in price results in (Click to sale v in quantity demanded along the D2 demand curve. 4. This change in price results in (Clicktosele V in quantity supplied. 5. The new equilibrium has a {Click to sale V and a {C ink in sale v when compared to the original equilibrium. 6. Does this refute the law of demand? (Click to sale V 1'. Why? (Click to sale V Chapter 3 Assignment i 3 In which of the following statements are the terms supply and demand used correctly? A. In the corn market, demand often exceeds supply and supply sometimes exceeds demand. B. The price of corn rises and falls in response to changes in supply and demand. O Statement A O Statement BWhat are the determinants of supply? Instructions: You may select more than one answer. Click the hm: with a check mark for correct answers and click to empty the box for the wrong answers. a Income a Price of related goods a Technology a Tastes and preferences a Factor prices a Number of producers Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supplyr curve. l. Change in market price: (Click to sale V ll. Change in factor productivity: (Click to sale V ill. Change in producer expectations: (Click to sale V iv. Change in the price of other goods: (Click to sale V v. Change in technology: {Click In sale V vi. Change in factor prices: (Click to sale V vii. Change in taxes: (Click to sale V Given lhe following diagram. indicate whether these changes represent a change in supplyI or a change in quantity supplied. PFlCE Quantity A change from point A to point B = {Clickln sale V A change from point A to point C = (Click to sale V