True/False
Indicate whether the sentence or statement is true
or false.
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1.
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Prices, which are determined by all buyers and sellers as they interact in the
marketplace, allocate the economy's scarce resources.
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2.
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A
market is a group of buyers and sellers of a particular product.
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3.
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In a
perfectly competitive market, buyers and sellers are price setters.
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4.
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The
quantity demanded of a product is the amount that buyers are willing and able to purchase at a
particular price.
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5.
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The
principle of demand states that the quantity demanded of a product is positively related to
price.
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6.
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If
the demand for a good falls when income falls, the good is called an inferior good.
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7.
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When
an increase in the price of one good lowers the demand for another good, the two goods are called
complements.
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8.
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Baseballs and baseball bats are substitute goods.
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9.
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An
increase in the price of pizza will shift the demand curve for pizza to the left.
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10.
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The
market demand is the average of all of the individual demands for a particular good or
service.
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11.
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Whenever a determinant of demand other than price changes, the demand curve
shifts.
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12.
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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.
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13.
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The
quantity supplied of a good or service is the amount that sellers are willing and able to sell at a
particular price.
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14.
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The
principle of supply states that, other things equal, when the price of a good rises, the quantity
supplied of the good falls.
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15.
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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.
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16.
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A
supply curve slopes upward because, all else equal, a higher price means a greater quantity
supplied.
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17.
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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.
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18.
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If
there is an improvement in the technology used to produce a good, the supply curve for that good will
shift to the left.
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19.
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A
reduction in an input price will cause a change in quantity supplied, but not a change in
supply.
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20.
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At
the equilibrium price, quantity demanded is equal to quantity supplied.
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21.
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Surpluses drive price up while shortages drive price down.
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22.
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A
shortage will occur at any price below equilibrium price and a surplus will occur at any price above
equilibrium price.
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23.
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It is
not possible for demand and supply to shift at the same time.
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24.
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In a
competitive market, the price of any good adjusts until quantity demanded equals quantity
supplied.
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25.
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The
behavior of buyers and sellers drives markets toward equilibrium.
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