IBM I: Markets, Demand and Supply

Question 1

What is the definition of supply?

Accepted Answer

The quantity of a good that producers are willing to sell at various prices

Question 2

When the price of apples increases, what happens to the demand for the product it substitutes (like pears)

Accepted Answer

Demand increases

Question 3

At equilibrium, what occurs?

Accepted Answer

Quantity demanded equals quantity supplied

Question 4

What happens to the supply curve when a tax is imposed on a product?

Accepted Answer

It shifts to the left

Question 5

If the cost of raw materials for a product falls, what is the expected effect on the supply curve?

Accepted Answer

It shifts to the right

Question 6

What impact do demographic changes have on market demand?

Accepted Answer

Changes in the age and gender can influence the types of products purchased

Question 7

Inferior goods are products whose demand increases when income falls

Accepted Answer

True

Question 8

Businesses will supply more at higher prices if production costs stay the same

Accepted Answer

True

Question 9

An increase in the price of complements will lead to an increase in demand for the original good.

Accepted Answer

False

Question 10

Equilibrium price is the price where the quantity of soft drinks demanded is less than the quantity supplied

Accepted Answer

False

Question 11

What is the definition of demand?

Accepted Answer

The quantity of a good consumers are willing to buy at various prices

Question 12

A government subsidy on a product will typically

Accepted Answer

Increase the supply

Question 13

A government campaign to promote a healthier lifestyle will likely decrease the demand for healthy food

Accepted Answer

False

Question 14

Which of the following scenarios illustrates the Law of Demand?

Accepted Answer

An increase in price of coffee leads to a decrease in the quantity demanded

Question 15

According to the Law of Demand, when the price of a good decreases, what happens to the quantity demanded?

Accepted Answer

Increases

Questions 15