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Supply/Demand Test Review
Income effect occurs when a consumer has an
Inelastic demand means
Supply/Demand Test Review
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Answers
1
Inelastic demand means
the market is flexible
supply os flexible
changes in price have a large effect on amount demanded
changes in price have little or no effect on the amount demanded
2
Income effect occurs when a consumer has an
Decrease in purchasing power
Increase in purchasing power
No change in purchasing power
No desire to purchase
3
Availability of substitutes, proportion of income, luxuries vs necessities (budget), time are all determinants of what?
Variable shifts
Elasticity of supply
Elasticity of demand
Marginal shifts
4
% change in quantity demanded / % change in price is the formula for what?
Elasticity of demand
Elasticity of supply
Marginal costs
Total costs
5
Law of Demand
people demand more variety of products
people buy more of a good when its price decreases
people buy less of a good when its price decreases
people demand less variety pf products
6
Decrease in price will increase demand because
Higher prices induce consumer
Higher production rates induce consumers
Lower prices induce consumers
Lower production rates induce consumers
7
An increase in consumer demand will shift the supply curve
False
True
8
The next worker hired will add less production is an example of
The law of diminishing returns
Stagnant returns
No change in returns
Increasing returns
9
Causes of a shift in supply
All of the above
Price of inputs/resources
Number of companies in the industry
Taxes and technology
10
Elasticity of demand means consumers are responsive to price change
False
True
11
When producers have more than consumers want
excess demand
price ceiling
price floor
excess supply
12
The sum of fixed and variable costs
fixed cost
variable cost
total cost
excess cost
13
A SPECIFIC type of soap will have elastic or inelastic demand?
Elastic
Inelastic
Both
Neither
14
When one good/service increases and a consumer chooses an alternative option
elasticity effect
pricing effect
Income effect
substitution effect
15
Types of variable costs
Hourly employees
Raw materials
All of the above
Electricity
16
Whatever must be given up to obtain some item
supply
demand
elasticity
opportunity cost
17
What type of cost is rent?
variable cost
total cost
excess cost
fixed cost
18
If the supply of strawberries has increased than there will be an
Increase in availability of product at various prices
rise in the price of strawberries
shift in the equlibrium demand for strawberries
increased demand for strawberries
19
Advertising (influencing consumer tastes) can shift a demand curve which direction (increase in demand)
Left
Right
20
Causes of shift in demand
Consumer tastes and advertisiing
All of the above
Consumer expectations and population
Income
21
When quantity demanded is greater at each possible price you have
Increase in costs
Increase in supply
Increase in product demand
Increase in resources
22
When technology improves than
demand will decrease
supply will increase
supply will decrease
demand will increase
23
If the cost of resources increase, supply curve shifts which direction?
Right
Left
Up
Down
