On a supply and demand graph, what happens when a tax is placed on a good?

the supply curve shifts to the left

goods used in place of one another.

What does new technology generally do to production?

it lowers cost and increases supply

Which of the following leads to an increase in supply?

a decrease in the cost of raw materials

What effect does a rise in the cost of labor or raw materials have on the cost of a good?

A rise in input costs raises the cost of a good

What happens to a market in equilibrium when there is an increase in supply?

Qty supplied will exceed qty demanded so the price will drop

Which statement explains why prices rise in a market?

There is excess demand in the market.

What do sellers do if they expect the price of goods they sell to increase in the future?

store the goods until the price rises

Which of these best describes the influence of high prices on the behavior of producers?

High prices are an incentive for producers to produce more.

What happens when any market is in disequilibrium and prices are flexible?

Market forces push toward equilibrium.

According to the law of supply,

the higher the price the larger the quantity produced.

What are inferior goods?

good for which the demand falls when income rises

A supply schedule is characterized by which of the following?

It lists supply for a specific good at various prices.

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Supply/Demand Test

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Questions 22

Answers

1
On a supply and demand graph, what happens when a tax is placed on a good?
the demand curve shifts to the left
the supply curve shifts to the left
nothing happens
the demand curve shifts to the right
2
A shift in the demand curve to the right means which of the following?
a change in consumer income
demand has increased
a rise in prices
a decrease in both price and quantity demanded
3
Substitutes are
goods which cause prices to rise.
goods used in place of one another.
goods that are bought and used together.
goods that cannot be replaced.
4
An increase in supply and/or a decrease in demand results in
lower prices.
higher interest rates.
lower taxes.
higher taxes.
5
What does new technology generally do to production?
it increases cost and decreases supply
it lowers cost and decreases supply
it has very little effect on production
it lowers cost and increases supply
6
Which of the following leads to an increase in supply?
a decrease in the cost of raw materials
diminishing marginal returns
a change in the law supply
an increase in the cost of raw materials
7
What effect does a rise in the cost of labor or raw materials have on the cost of a good?
The good becomes more difficult to produce
The good becomes cheaper to produce
A rise in input costs raises the cost of a good
It does not have any effect on the cost of a good.
8
A situation where consumers buy a different qty than they did before at every price is called
a shift in size of the demand curve
a move along the demand curve
a change in demand
a change in expectations
9
What happens to a market in equilibrium when there is an increase in supply?
Excess supply means producers will produce more of a good
under supply means a good will be expensive
Qty demanded will exceed qty supplied so the price will drop
Qty supplied will exceed qty demanded so the price will drop
10
Which statement explains why prices rise in a market?
New producers enter the market.
There is excess demand in the market.
Producers produce a qty greater than consumers want to buy.
11
When a consumer is able and willing to buy a good or service, what is it?
demand
allocation
elasticity
consumption
12
A government payment to produce a certain good or service is a
subsidy.
non-price determinant.
incentive.
complement.
13
What do sellers do if they expect the price of goods they sell to increase in the future?
sell the goods now and try to invest the money
store the goods until the price rises
sell the goods now but try to get the higher price for them
store the goods indefinitely
14
Which of the following is NOT an example of complements ?
cheerios and milk
skis and ski boots
calculator and cell phone
row boats and paddles
15
Which of these best describes the influence of high prices on the behavior of producers?
HIgh prices influence producers to use fewer raw materials.
High prices are an incentive for producers to produce more.
High prices are an incentive for producers to produce less.
High prices have no influence on the behavior of producers.
16
A drop in price will
not affect the demand for goods
not affect the law of demand
increase the demand for goods
decrease the demand for goods
17
What is it called when buyers will purchase as much as sellers are willing to sell?
excess demand
supply an demand
surplus
equilibrium
18
Which type of tax is levied on specific items or services such as gasoline and telephones?
gift tax
customs duty
estate tax
excise tax
19
What happens when any market is in disequilibrium and prices are flexible?
Market forces push toward equilibrium.
Sellers waste their resources.
Excess demand is created.
unsold perishable goods are thrown out.
20
According to the law of supply,
the higher the price the larger the quantity produced.
if the price of a good rises some firms will produce less.
the lower the price the larger the quantity consumed.
if the price of a good falls new firms may enter the market.
21
What are inferior goods?
good for which the demand falls when income rises
goods that no one want to buy
goods that are used in place of one another
goods that are not well produced
22
A supply schedule is characterized by which of the following?
It shows the factors that could influence supply.
It lists supply for a specific good at various prices.
It is sensitive to changes in the costs of labor and parts.
It shows the quantity supplied at only one price.

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