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Questions and Answers
A market is defined as a group of buyers and sellers of a particular good or service
A market is defined as a group of buyers and sellers of a particular good or service
True
Sellers determine the demand for a product.
Sellers determine the demand for a product.
False
The quantity demanded refers to the amount of a good that buyers are willing and able to purchase.
The quantity demanded refers to the amount of a good that buyers are willing and able to purchase.
True
According to the law of demand, other things being equal, when the price of a good rises, the quantity demanded increases.
According to the law of demand, other things being equal, when the price of a good rises, the quantity demanded increases.
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The market demand curve represents the sum of all individual demands for a product.
The market demand curve represents the sum of all individual demands for a product.
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The demand schedule shows the relationship between the price of a good and the quantity demanded at that price.
The demand schedule shows the relationship between the price of a good and the quantity demanded at that price.
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A movement along the demand curve occurs when the price of the good changes while all other factors remain constant.
A movement along the demand curve occurs when the price of the good changes while all other factors remain constant.
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An increase in income always shifts the demand curve to the right.
An increase in income always shifts the demand curve to the right.
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If the price of a substitute good rises, the demand for the related good will increase.
If the price of a substitute good rises, the demand for the related good will increase.
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An expected increase in future income will decrease current demand.
An expected increase in future income will decrease current demand.
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Study Notes
Market Definition
- A market consists of buyers and sellers of a specific good or service.
Demand
- Sellers do not determine demand.
- Quantity demanded is the amount of a product buyers are willing and able to purchase.
- Law of Demand: As the price of a good increases, the quantity demanded decreases, all else being equal.
- Market Demand Curve: Represents the total demand for a product, combining individual demands.
- Demand Schedule: Shows the relationship between a good's price and its quantity demanded at each price level.
- Movement along the demand curve: Occurs when only the price of the good changes, while other factors remain constant.
Demand Curve Shifts
- An increase in income generally shifts the demand curve to the right, indicating an increased demand.
- If the price of a substitute good (a good that can be used in place of another) rises, the demand for the related good will increase.
- An expected increase in future income may decrease current demand as consumers anticipate being able to purchase more in the future.
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Description
This quiz explores the fundamental concepts of markets, focusing on the dynamics between buyers and sellers of goods and services. Test your comprehension of what constitutes a market and its key components.
