ECO 1104 Chapter 4: Ch.4-Market forces of supply and demand

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve

The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.

Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

Markets, viewed from the perspective of the supply and demand:

A. assume many buyers and many sellers of a standardized product.
B. assume market power so that buyers and sellers bargain with one another.
C. do not exist in the real-world economy.
D. are approximated by markets in which a single seller determines the price.