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Supply & Demand
Supply & Demand
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Review of supply and demand
Flashcards
41 cards
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Practice quiz
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Questions
41
Answers
1
The following is not a determinant of Demand
Price of Substitutes
Technology
# of Consumers
Taste
2
If the price of hot chocolate increases,
The demand for marshmallows increases
The demand for ice cream increases
The demand for hot tea increases
The demand for marshmallows is unchanged
3
A decrease in the cost of coffee beans, will allow coffee producers to
Substitute
Decrease the supply
Increase the supply
Demand more
4
The following is a determinant of Demand
Change in Income
Taxes
# of Suppliers
Subsidies
5
A price below a product's equilibrium will result in a _____ that will force the price to _____
Surplus/fall
Shortage/fall
Surplus/rise
Shortage/rise
6
When a product has a small change in quantity supplied/ demanded when there price change?
Hyperelastic
Elastic
Inelastic
Unit Elastic
7
In order for a price floor to be effective, the price must be set
Above the current equilibrium price
Constant with the current equilibrium price
Below the current equilibrium price
At 10 percent above the current equilibrium price
8
Which of the following would decrease demand for a normal good? A decrease in:
Change in Income
Price of a Complement
Price
Cost of relevant resources
9
Demand is downward sloping due to :
Inferior and normal goods
Inverse relationship between price and quantity
The number of consumers
The substitute and complement effect
10
Marshmallows and hot chocolate are:
Inferior Goods
No relationship
Substitutes
Complements
11
An increase in price causes a/an
Increase in Demand
Increase in supply
Decrease in the number of producers
Decrease in Supply
12
A increase in the price of butter would most likely increase the demand for:
margarine
jelly
syrup
bagels
13
During a power outage, the demand for candles
increases due to income, normal goods
decreases due to consumer preferences
decrease, due to inferior goods
increases due to # of buyers
14
How many of Jersey Mike's Subs a person demands depends on:
How long the line is.
The price of the Subs
The price of cokes
How good the french fries are
15
What happens when quantity supplied exceeds quantity demanded?
Supply must shift to the right
Creates a surplus
Creates a shortage
Creates a need to increase supply
16
A shortage implies the market price is
Too low
Too high
Too competitive
Perfect
17
One of these things is not like the others
State of Technology
# of Consumers
Price of Related Goods - Complements
Conumer Tastes
18
An increase of wages will lead to a:
decrease in Supply
Increase elasticity
increase in Supply
decrease in demand
19
If a product is responsive/sensitive to a change in price, this product is considered?
Inelastic
Elastic Clause
Elastic
Unit Elastic
20
A 15% increase in the price of pizza causes demand for pizza to change by 20% , which means?
PED = elastic
PED = inelastic
PED = unchanged
PED = unit elastic
21
Which of the following is an example of a price floor?
Food Tax
Rent Controlled Apartments
Minimum Wage
Sales Tax
22
What happens to the equilibrium price when supply decreases?
Equilibrium increases
Equilibrium decreases
There is not enough information to answer this
Equilibrirum stays the same
23
What occurs when quantity demanded exceeds quantity supplied?
Shortage
Market clears
Surplus
Market equilibrium
24
The Law of Supply is
based on consumers behavior
A direct relationship between price and quantity
says that when price goes up, demand goes down
An inverse relationship between price and quantity
25
Supply is best defined as
How many goods are producers willing and able to produce
How many goods are regulated by the federal government
How many goods and services demanded
How many goods are consumers willing to buy
26
A surplus implies the market price is
Too high
Too competitive
Too low
Too perfect
27
In order for a price ceiling to be effective, the price must be set
Above the current equilibrium
At the current equilibrium
Below the current equilibrium
Roughly 3 % below equilibrium
28
What does the graph demonstrate?
Decrease in demand
Increase in demand
Decrease in supply
Increase in supply
29
What happens to the equilibrium price when supply increases?
Equilibrium increases
Equilibrium decreases
Equllibrirum price stays the same
There is not enough information to answer this
30
When a change in price causes an equal change in quantity demanded or supplied
Elastic
Hyperelastic
Unit Elastic
Inelastic
31
One of the following is not a determinant of Supply:
State of Technology
Cost of relevant resources
Change in Price of Related Goods
# of sellers
32
When there is no pressure to change the price, no shortages or surpluses, a market is in what?
a price floor
a price ceiling
equilibrium
Adam Smith land
33
What happens to equilibrium price when demand decreases?
Equilibrium increases
Equilibrium decreases
Equilibrirum stays the same
There is not enough information to answer this
34
A decrease in the price of peanut butter would most likely increase the demand for
Turkey
Coffee
Jelly
Ham
35
An increase in the price of pizza will lead to an increase in which of the following?
the demand of calzones (substitute)
the supply of cheese
the supply of coca cola
the demand for flour
36
What does the following graph demonstrate?
Increase in demand
Decrease in demand
Increase in supply
Decrease in supply
37
What happens to the equilibrium price when demand increases?
Equilibrium decreases
There is not enough information to answer this
Equllibrirum price stays the same
Equilibrium increases
38
For many people, Spam is a
an inferior good
a complement
normal good
a substitute
39
The Law of Demand says that :
As Price goes up, quantity demanded remains the same
As price goes up, quantity demanded goes down
As price goes up, the quantity supplied goes up
As price goes up, quantity demanded goes up
40
Price above a product's equilibrium will result in a ____ that will force the price to _____
Shortage/fall
Surplus/rise
Shortage/rise
Surplus/fall
41
Dozen of eggs P changes from 1.89 to 2.50 causing D to change from 300 to 289, what's the PED?
1.6, elastic
8, elastic
.8, inelastic
.13, inelastic
