According to the law of demand, the quantity demanded of a good is related to
A) the average price of all goods.
B) income.
C) any factor that affects the decision of an individual consumer but not the market.
D) the relative price of that good.
Ques. 2The price of milk increases. Which of the following is NOT part of the likely chain of events that follows from this price change?
A) Some milk consumers reduce their consumption of milk.
B) Milk producers increase their production of milk.
C) The producers of feed for dairy cows increase production.
D) The manufacturers of milking machines lay off some workers.
Ques. 3Microeconomics is concerned with studying which of the following?
A) the determinants of national unemployment
B) the effects of monetary policy
C) the study of individual markets
D) all of the above
Ques. 4Which type of resource will improve through more education and training by workers?
A) money
B) physical capital
C) natural resources
D) human capital
Ques. 5In the price system
A) prices are set by government action.
B) consumers alone set the price.
C) producers alone set the price.
D) prices are set by the interaction of supply and demand.
Ques. 6When the term price is used in the law of demand, price refers to
A) the dollar price of the good.
B) the price of the good relative to the price of another good.
C) the absolute price of the good.
D) the nominal price of the good relative to its nominal price in the previous year.
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