1. CarMax is a national chain that sells used cars. The likely impact of its arrival in the market would be to _____. Everything else held constant, this would likely _____ the price of used cars.

   	a.	increase the quantity supplied of used cars; lower
   	b.	shift the supply of used cars to the left; raise
   	c.	shift the supply of used cars to the right; lower
   	d.	shift the supply of used cars to the right; raise

2 points

Question 2

1. A market demand curve

   	a.	is of no use to economists, who are concerned only with individual preferences.
   	b.	is the horizontal summation of individual demands.
   	c.	reflects a positive relationship between price and quantity.
   	d.	reflects society's changing tastes and preferences.

2 points

Question 3

1. An increase in production subsidies causes an increase in supply.

   	a.	True
   	b.	False

2 points

Question 4

1. What signals information between buyers and sellers in a market?

   	a.	stock exchanges
   	b.	the Internet
   	c.	prices
   	d.	the government

2 points

Question 5

1. Which factor will NOT cause a change in demand?

   	a.	an increase in the number of consumers
   	b.	a decrease in income
   	c.	an increase in the price of a complementary good
   	d.	a decrease in the price of a good

2 points

Question 6

1. Willingness-to-pay differs from person to person but is the same under varying circumstances.

   	a.	False
   	b.	True

2 points

Question 7

1. The law of supply states that if prices fall, consumers will purchase fewer products in the market.

   	a.	False
   	b.	True

2 points

Question 8

1. From the seller's perspective, a relatively low price is a good price.

   	a.	False
   	b.	True

2 points

Question 9

1. Graphically, a change in demand is represented by a shift of the demand curve.

   	a.	True
   	b.	False

2 points

Question 10

1. A manufacturer of plastic canoes and fiberglass kayaks is experiencing an increase in the price of kayaks in the marketplace, while the price of oil used to make plastic is rising. These two events are MOST likely to lead to a(n)

   	a.	increase in the quantity supplied of canoes and a decrease in the supply of kayaks.
   	b.	increase in the supply of both kayaks and canoes.
   	c.	increase in the quantity supplied of kayaks and a decrease in the supply of canoes.
   	d.	decrease in the supply of both kayaks and canoes.