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61) The law of demand

A) is only an assumption that cannot be tested.

B) only applies to necessities, not to luxuries.

C) is supported by observations of human behavior in the marketplace.

D) does not apply to scarce goods.

62) Which one of the following statements is TRUE?

A) If the money price of a good increases, its relative price necessarily increases.

B) If the money price of a good increases, its relative price necessarily decreases.

C) The relative price of a good refers to the opportunity cost of purchasing it.

D) Rational consumers always ignore the monetary price of a good when deciding whether to buy it.

 

63) Demand is defined as

A) a schedule of how much of an item people will purchase at any particular price of that item during a specified time period, other things being constant.

B) a specific quantity of an item that people want at a particular price of that item during a specified time period, other things being constant.

C) a schedule of how much of a good or service people will purchase at any particular price of a different item during the specified time period, other things being constant.

D) a specific quantity of a good or service that people will purchase at one particular price of another item during a specified time period, other things being constant.

 

64) The fact that when the price of a good goes up, people buy less of it is known as the

A) law of supply.

B) law of demand.

C) concept of market equilibrium.

D) need for inferior goods.

 

65) Ceteris paribus, as the price of a good or service increases

A) people will buy more of it.

B) people will buy less of it.

C) people will want less of it.

D) people will want more of it.

66) The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

A) consumer income.

B) the price of the good concerned in the law of demand.

C) the prices of substitutes.

D) tastes and preferences.

 

67) The price of one product in terms of another commodity is called its

A) relative price.

B) money price.

C) financial price.

D) converse price.

 

68) What type of relationship does the law of demand demonstrate?

A) direct

B) positive

C) inverse

D) static

 

69) Consider the following:

 

 

The relative price of movies this year has

A) increased.

B) decreased.

C) stayed the same.

D) Not enough information has been given to calculate an answer.

70) Consider the following:

 

 

The relative price of hamburgers this year has

A) increased.

B) decreased.

C) stayed the same.

D) Not enough information has been given to calculate an answer.

 

 

 

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