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Supply & Demand Review Flashcards | StudBud
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Supply & Demand Review
Supply & Demand Review
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Questions
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Answers
1
According to the graph, which of the following prices would represent an effective price ceiling?
1.20
1.60
2.00
.80
2
"Income" is a shifter of Demand
False
True
3
In the figure, which movement would be caused by an increase in the cost of resources used to produce barrels of oil?
Curve S2 to S1
Point A to C
Point A to E
Curve S2 to S3
4
What direction does the supply curve shift if there is an increase in supply?
right
price
no shift
left
5
"Taste and Preferences" are a shifter of supply
False
True
6
Increasing minimum wage will decrease supply
True
False
7
Where is equilibrium located on the supply & demand graph?
Quantity Supplied is highest
Where demand is greater than supply
Demand is great
quantity supplied=quantity demanded
8
In the figure, which move reflects a decrease in price of a fruit snack?
D1 to D3
D2 to D1
A to E
E to A
9
If quantity demanded is greater than quantity supplied, this is called
demand
demanding
surplus
shortage
10
A subsidy will increase demand
False
True
11
What does NOT change demand?
immediate price change
consumer income
consumer tastes and preferences
number of consumers
12
The Law of Supply states as price increases
quantity supplied decreases
quantity supplied increases
supply decreases
supply increases
13
"Future Price Expectations" are a shifter of demand
False
True
14
If quantity supplied is greater than quantity demanded, what disequilibrium exists?
bad business
surplus
shortage
supply
15
When the price of Pepsi increases, what happens to the demand for coke, a substitute good?
The demand curve will not shift
The demand will shift to the left
The demand curve will decrease
The demand will shift to the right
16
How are EQ and EP determined in most markets?
by the law of demand
the government
consumer and producer interaction
by a point on the PPC
17
If a price floor is set for Product X, what type of disequilibrium will happen in Product X's market?
A disequilibrium will not exist
a shortage in the market for Product X
An increase in quantity supplied for Product X
A surplus in the market for Product X
18
If producers decide to sell their bars for .40, what type of disequilibrium would this cause in the market?
A surplus of 400 bars
A shortage of 100 bars
A surplus of 500 bars
A shortage of 400 bars
19
What will happen to EQ and EP for computers: it is discovered that 2 hrs of computer time will make you blind.
EP decrease, EQ increase
EP Increase, EQ increase
EP increase, EQ decrease
EP decrease, EQ decrease
20
"Technology" is a shifter of Supply
True
False
21
Substitute goods are a shifter of supply
False
True
22
What will happen to the supply curve for cars if a recession forces car makers to shut down their business?
Supply curve shifts left
Upward movement on the supply curve
Supply curve shifts right
Downward movement on the supply curve
23
What is the point where supply and demand curves cross called?
price
economics
quantity
equilibrium
24
If the cost of producing pears increases, what happens to EP and EQ?
EP increase, EQ increase
EP increase, EQ decrease
EP decrease, EQ decrease
EP decrease, EQ increase
25
Which curve reflects how a growth in population can affect the market for fruit snacks?
D2 to D3
D3 to D2
Point A to Point B
D2 to D1
26
When the price of milk decreases, what happens to the demand for milk?
The demand curve will decrease
The demand curve will not shift
The demand will shift to the left
The demand will shift to the right
27
Technological improvement shifts which curve in which direction?
Supply curve to the left
Demand curve to the left
Demand curve to the right
Supply curve to the right
28
When price rises:
supply lowers
quantity supplied lowers
quantity supplied rises
supply rises
29
Which direction does a decrease in demand shift?
right
movement along the curve
up
left
30
According to the law of demand, as price increases
Quantity Demanded increases
Demand Decreases
Quantity Demanded decreases
Demand increases
31
A price ceiling can lead to a _____.
surplus
nothing
shortage
price floor
32
Higher population causes demand to:
increase; shift right
decrease; shift right
decrease; shift left
increase; shift left
33
What is quantity demanded?
How much sellers will produce at different prices
How much consumers will purchase at different prices
How much satisfaction buyers receive from a purchase
How much people want the product if it is free
