INDIVIDUAL QUIZ (20%). Please, circle or highlight correct answer. 1. The law of demand states that: a) There is a direct or positive relationship between the price of a commodity and the quantity demanded. b) The quantity demanded will be higher the lower is its price. c) The quantity demanded will be lower the lower is its price. d) The quantity demanded will be higher the higher is its price.

2. The law of supply states that: a) There is a direct or positive relationship between the quantity supplied of a good or service and its price. b) The higher the price of a good and service, the lower the amount supplied. c) The lower the price of a good or service, the more quantity is supplied. d) Supply is higher than demand at the equilibrium price.

3. The quantity demanded of Pepsi has decreased. The best explanation for this is that: a) The price of Pepsi increased. b) Pepsi consumers had an increase in income. c) Pepsi's advertising is not as effective as in the past. d) The price of Coca Cola has increased.

4. Market equilibrium exists when _____________ at the prevailing price. a) quantity demanded is less than quantity supplied b) quantity supplied is greater than quantity demanded c) quantity demanded equals quantity supplied d) quantity demanded is greater than quantity supplied

5. A movement along the demand curve to the left may be caused by: a) A decrease in supply. b) A rise in the price of inputs. c) A fall in the number of substitute goods. d) A rise in income.

6. Injections of money: a) Decrease aggregate demand b) Always equal savings c) Always equal national income d) Include investment and export spending

7. An increase in national income is: a) Likely to increase exports b) Likely to decrease savings c) Likely to decrease investment d) Likely to increase spending on imports

8. An increase in national income is likely to: a) Decrease tax receipts b) Worsen the trade position c) Automatically cause an increase in government spending d) Cause an increase in injections into the economy

9. A significant increase in the government budget deficit is likely to: a) Reduce injections into the economy b) Reduce national income c) Move the economy away from full employment d) Boost aggregate demand

10. If injections of money are greater than withdrawals: a) National income is likely to increase b) National income is likely to decrease c) National income will stay in equilibrium d) Prices will fall

11. In the circular flow of income model injections: a) Are assumed to be exogeneous (independent of national income) b) Are assumed to be a function of national income c) Decrease aggregate demand d) Decrease the investment into an economy

12. For equilibrium in an open four sector economy: a) Actual injections = actual withdrawals b) Planned injections = planned withdrawals c) Savings = investment d) Government spending = tax revenue

13. A reflationary (expansionist) policy: a) Increases aggregate supply b) Increases aggregate demand c) Decreases the price level d) Increases full employment

14. A reflationary policy could include: a) decreasing injections b) increasing taxation rates c) increasing interest rates d) increasing government spending

15. Which of the following is an injection into the economy? a) Investment b) Social cash transfers c) Taxation d) Import spending 16. Which of the following is a characteristic of a perfectly competitive market? a) Firms are price setters. b) There are few sellers in the market. c) Firms can exit and enter the market freely. d) All of these 17. Which of the following is NOT a feature of monopolistic competition? a) Numerous sellers b) Product differentiation c) Numerous buyers d) Homogenous products 18. In which form of market structure would price be the key factor when competing? a) Monopoly b) Oligopoly c) Monopolistic Competition d) Perfect Competition

19. When the market is run by a small number of firms that together control the majority of market share is known as a) Oligopoly b) Duopoly c) Oligopsony d) Perfect Competition

20. Image building objectives are common in _____ type of market structure? a) Perfect Competition b) Oligopoly c) Monopsony d) Monopoly