Demystifying Demand
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Questions and Answers

Which of the following is true about the market for cellphones?

  • Cellphones may be said to be perfectly competitive since they have homogeneous features. (correct)
  • Cellphones are an example of a product with perfectly inelastic supply due to limited resources.
  • Cellphones are an example of a product with inelastic demand due to constant technological changes.
  • Cellphones are an example of a public good due to their widespread use.
  • Cellphones are an example of a product with perfectly elastic supply due to high competition.

    • In an imperfect market, firms have:

  • Some degree of control over price. (correct)
  • Complete control over price due to limited competition.
  • Control over quantity but not price.
  • No control over price due to high competition.
  • No influence on market demand.

    • Which of the following statements about technological changes and supply is true?

  • Technological changes only affect the demand for goods.
  • Technological changes always increase the supply of any good.
  • Technological changes will not always increase the supply of any good. (correct)
  • Technological changes have no impact on the supply of any good.
  • Technological changes always decrease the supply of any good.

    • What is the relationship between equilibrium price and equilibrium quantity when changes in the market come from the demand side?

    <p>Equilibrium price and equilibrium quantity move in opposite directions.</p> Signup and view all the answers

    Which of the following is true about externalities?

    <p>Externalities may occur in either consumption or production activities.</p> Signup and view all the answers

    The law of supply says that price and quantity supplied are:

    <p>Positively related</p> Signup and view all the answers

    The minimum wage is an example of a:

    <p>Floor price</p> Signup and view all the answers

    A market is an arrangement that brings the buyers and sellers of a particular good or service:

    <p>Together</p> Signup and view all the answers

    A floor price always results in a:

    <p>Surplus</p> Signup and view all the answers

    The market for cellphones may be said to be perfectly competitive since cellphones have:

    <p>Homogeneous features</p> Signup and view all the answers

    The law of supply says that price and quantity supplied are positively related.

    <p>True</p> Signup and view all the answers

    The minimum wage is an example of a ceiling price.

    <p>False</p> Signup and view all the answers

    A market is an arrangement that brings the buyers and seller of a particular good or service together.

    <p>True</p> Signup and view all the answers

    A floor price always results in a surplus.

    <p>False</p> Signup and view all the answers

    Equilibrium price and equilibrium quantity move in the same direction if changes in the market come from the supply side.

    <p>False</p> Signup and view all the answers

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