Name:     ID: 

October 9

Indicate whether the sentence or statement is true or false.


Prices, which are determined by all buyers and sellers as they interact in the marketplace, allocate the economy's scarce resources.


A market is a group of buyers and sellers of a particular product.


In a perfectly competitive market, buyers and sellers are price setters.


The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.


The principle of demand states that the quantity demanded of a product is positively related to price.


If the demand for a good falls when income falls, the good is called an inferior good.


When an increase in the price of one good lowers the demand for another good, the two goods are called complements.


Baseballs and baseball bats are substitute goods.


An increase in the price of pizza will shift the demand curve for pizza to the left.


The market demand is the average of all of the individual demands for a particular good or service.


Whenever a determinant of demand other than price changes, the demand curve shifts.


A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.


The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.


The principle of supply states that, other things equal, when the price of a good rises, the quantity supplied of the good falls.


If a company making frozen orange juice expects the price of their product to be higher next month, it will supply more to the market this month.


A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.


A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.


If there is an improvement in the technology used to produce a good, the supply curve for that good will shift to the left.


A reduction in an input price will cause a change in quantity supplied, but not a change in supply.


At the equilibrium price, quantity demanded is equal to quantity supplied.


Surpluses drive price up while shortages drive price down.


A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.


It is not possible for demand and supply to shift at the same time.


In a competitive market, the price of any good adjusts until quantity demanded equals quantity supplied.


The behavior of buyers and sellers drives markets toward equilibrium.

Submit          Reset Help