Test Bank, For Macroeconomics 11th Edition By N. Gregory Mankiw.

Chapter 03 Testbank
g g




Student:g


1. IngCuba,gagbureaucraticgcommitteegmakesgthegproductiongdecisionsgforgthegcountry'sgfirmsgan

dgfactories.gThereforegCubagisgangexamplegofga




A. centralizedgeconomy.


B. capitalistgeconomy.


C. mixedgeconomy.


D. puregfree-marketgeconomy.


2. Thegentireggroupgofgbuyersgandgsellersgofgagparticularggoodgorgservicegmakesgu
p




A. onlygthegdemandgcurve.


B. onlygthegsupplygcurve.


C. agmarket.


D. equilibrium.

,3. Ingordergtogunderstandghowgthegpricegofgaggoodgisgdeterminedgingthegfreegmarket,gonegmu

stgaccountgforgthegdesiresgof:




A. purchasersgexclusively.


B. sellersgexclusively.


C. governmentalgagenciesgexclusively.


D. purchasersgandgsellers.


4. Buyersgandgsellersgofgagparticularggoodgcomprisegth
e




A. marketgforgtheggood.


B. demandgforgtheggood.


C. supplygforgtheggood.


D. productiongpossibilitiesgcurvegforgtheggood.


5. Ingagmarket,gthegdemandersgaregtheg andgthegsuppliersgaregtheg .




A. bosses;gworkers


B. poor;gwealthy


C. buyers;gsellers


D. sellers;gbuyers

,6. "Holdinggallgothergrelevantgfactorsgconstant,gconsumersgwillgpurchasegmoregofgaggoodgasgthegpric

egfalls."gThisgstatementgreflectsgthegbehaviorgunderlying




A. thegdemandgcurve.


B. angincreasegingdemand.


C. thegsupplygcurve.


D. agdecreasegingthegdemandgcurve.


7. Thegdemandgcurvegillustratesgthegfactgthatgconsumers




A. tendgtogpurchasegmoregofgaggoodgasgitsgpricegrises.


B. purchasegnamegbrandgproductsgmoregfrequentlygthanggenericgproducts.


C. tendgtogpurchasegmoregofgaggoodgasgitsgpricegfalls.


D. purchasegmoregofgaggoodgasgtheirgincomesgrise.


8. WhichgofgthegfollowinggisgNOTgtruegofgagdemandgcurve?




A. Itghasgnegativegslope.


B. Itgshowsgthegamountgconsumersgaregwillinggandgablegtogpurchasegatgvariousgprices,gholdin
ggothergfactorsgconstant.


C. Itgrelatesgthegpricegofgangitemgtogthegquantitygdemandedgofgthatgitem.


D. Itgshowsghowgangincreasegingpricegleadsgtogangincreasegingquantitygdemandedgofgaggood.

, 9. Agdemandgcurvegisg slopinggbecauseg .




A. downward;gofgincreasinggopportunitygcosts.


B. upward;gpeoplegprefergtogpurchaseghighgqualitygconsumerggoods.


C. downward;greservationgpricesgtendgtogfallgovergtime.


D. downward;gfewergpeoplegaregwillinggtogbuygthegitemgatghighergprices
.


10. Asgcoffeegbecomesgmoregexpensive,gJamalgstartsgdrinkinggtea,gthereforegquantitygdemandedgf

orgcoffeegdecreases.gThisgisgcalled




A. thegincomegeffect.


B. thegchangegingequilibrium.


C. thegsubstitutiongeffect.


D. agshiftgingthegdemandgcurve.