The law of supply states that

As a price of a good rises supply increases

Your favorite cereal is going on sale next weekend. What happens to your demand for cereal now?

Your demand would decrease due to consumer expectations

Which of the following best represents the market deals with shortages

Buyers bid up the price encouraging producers to make more

Which of the following is true of equilibrium?

It is where the market operates most efficiently

If a large crop of tomatoes were to die off, which of the following would happen to pizza

Pizza prices would rise due to a decreased supply

Which of the following is a likely effect of a price ceiling?

A shortage of the product will occur

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Demand, Supply, and Prices review

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A review of Demand, Supply, and Prices

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Questions 10

Answers

1
The law of supply states that
As a price of a goes up demand goes down
As a price of a good rises supply increases
As the price of a good rises supply falls
As a price of a good falls supply increases
2
During wartime the government pays farmers to produce more wheat. Thus the supply of wheat
Increases due to regulation
Increases due to subsidies
Decreases due to future expectations of prices
Decreases due to taxes
3
Your favorite cereal is going on sale next weekend. What happens to your demand for cereal now?
Your demand would increase based on an income
Your demand would decrease due to consumer expectations
Your demand would remain the same
Your demand would increase based on demographics
4
Which of the following DOES NOT shift the demand curve
Subsides
Income
Population
Changes in price of complementary and related goods
5
Which of the following best represents the market deals with shortages
The government places a price ceiling on goods
The government places quotas on how much can be bought
Sellers lower the price in order to create more demand
Buyers bid up the price encouraging producers to make more
6
Which of the following is true of equilibrium?
It is where the market operates most efficiently
It will always stay at the same price and quantity
It is where price ceilings and floors are placed
When at equilibrium, surpluses and shortages occur
7
Rent and property taxes represent what kind of cost to a firm?
Variable Cost
Fixed Cost
Marginal Cost
Total Cost
8
If a large crop of tomatoes were to die off, which of the following would happen to pizza
Pizza prices would rise due to a decreased supply
Demand for pizza would fall
Pizza would become an inelastic good
Pizza would be unaffected by changes in tomatoes
9
Which of the following is an inelastic good?
Xbox One
Pizza
Tap water
Cellphone
10
Which of the following is a likely effect of a price ceiling?
Prices of the product the ceiling was placed on will rise
A shortage of the product will occur
A new equilibrium point will be reached
There will be a surplus of the product

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