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Supply & Demand
Supply & Demand
27 terms
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Supply & Demand Review
Flashcards
27 cards
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Practice quiz
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Questions
27
Answers
1
Law of Demand: When Price goes ________, Quantity Demanded goes _________
Down, Up
Up, Down
Up, Up
Down, Down
2
T or F This is a Supply Curve
True
False
3
T or F Sellers may raise the price of their product in reaction to a Shortage
True
False
4
Which is NOT true of an Equilibrium Point?
It provides the perfect price for a long period of time
No buyers are unable to buy the products they demand
Buyers and sellers are both happy
Sellers are able to sell their entire inventory
5
Law of Supply: When Price goes ________, Quantity Supplied goes _________
Up, Up
Down, Down
Down, Up
Up, Down
6
T or F When a change in Demand or Supply (or both) occurs, a new Equilibrium pt. will result
False
True
7
T or F Elasticity = how much you will change your demand for a good when its price changes
True
False
8
T or F This graph shows a Change in Demand
True
False
9
T or F The area below the Equilibrium Point reflects a Surplus situation
True
False
10
Which statement is TRUE regarding the role of Prices in the market?
It helps signal changes and trends in the market
Sellers ignore price when directing their resources to goods
It isn't involved in establishing of the Equilibrium Point
Prices rarely reflect the actual quality of competing goods
11
Total Revenue minus Total Costs equals:
Equilibrium
Marginal Cost
Variable Revenue
Profit
12
The point where Supply and Demand meet is called:
X marks the spot
Surplus
Equilibrium
Shortage
13
Which of the following may result in a change in demand?
All of the Above
Changes in Tastes (fads, etc.)
Seasonal factors
Expectations of market trends
14
Business costs that do not change regardless of the level of production are called:
Marginal supply revenue
Revenue maximizers
Variable costs
Fixed costs
15
Which of the following describes a product with Inelastic demand?
Many substitutes are available
You have plenty of time to make your buying decision
The product is a Necessity, not a luxury
Product cost is a low % of your budget
16
T or F As market price for a product goes higher, suppliers may shift resources to that product
False
True
17
Which would NOT lead to an increase in the supply of a product?
Lower tax rates make products cheaper to make
Materials needed to make the product become more expensive
Improved weather increases peoples' use of outdoor products
War in the Europe increases the need for military weapons
18
Which of the following is NOT a Variable Cost for a producer?
Electricity
Factory machines
Shipping costs
Cost of laborers
19
Demand for Crapco earbuds goes up, when Dr. Beets earbuds rise in price. These goods are:
Compliments
Substitutes
Competitors
Oligopolies
20
T or F Demand measures what you can afford to buy, whether or not you want to actually buy it
True
False
21
T or F A product with Inelastic Supply allows sellers to react quickly to price changes
True
False
22
When you will buy roughly the same amount of a product regardless of the price, your demand is:
Elastic
Inelastic
Boombastic
Plastic
23
T or F This is the Demand Curve for a product with Elastic Demand
True
False
24
T or F If demand for hamburgers goes down, the demand for buns will likely drop as well
True
False
25
Which is NOT true about Price?
Producers & Consumers can help to set prices
Producers & Consumers may need to react to changes in price
Producers are at the mercy of The Invisible Hand re: prices
David Price used to pitch for the Rays and is now a Red Sox
26
T or F A Change in Demand is a change in the entire Demand Schedule, not just the price
True
False
27
This is a _________ curve
Demand
Equilibrium
Shortage
Supply
