Chapter 4The Market Forces of Suppl

Chapter 4
The Market Forces of Supply and Demand
1. The commercial jetliner industry, consisting of Boeing and Airbus, represents
a. perfect competition.
b. oligopoly.
c. monopoly.
d. None of the above are correct.
2. In a perfectly competitive market,
a. advertising is widely used to influence demand and price.
b. firms are price takers rather than price makers.
c. firms produce a small number of differentiated products.
d. a small number of firms produce an identical product.
3. Suppose that a large dairy farmer is able to raise the market price of milk by withholding milk supply from the market. In this instance,
a. the milk market is perfectly competitive.
b. buyers will decrease their demand for milk.
c. buyers will increase their demand for milk.
d. the milk market is imperfectly competitive.
4. A group of buyers and sellers with the potential to trade is known as a(n)
a. cartel.
b. market.
c. industry.
d. sector.
5. The amount of a good or service that buyers would be willing and able to purchase at a specific price is known as
a. quantity demanded.
b. demand.
c. supply.
d. quantity supplied.
6. The demand curve for Beanie Baby dolls shows the quantity of dolls demanded
a. by suppliers of those dolls.
b. at the equilibrium price for Beanie Baby dolls.
c. at each level of income.
d. at each possible price of Beanie Baby dolls.
7. This diagram shows the market for in-line roller skates. Which of the following would cause a move from point A to point B?
a. an increase in the price of bicycles
b. a decrease in the price of bicycles
c. a decrease in consumer incomes
d. a popular new movie that convinces teens that skateboards are really cool