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Supply & Demand
Supply & Demand
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Supply and Demand Quiz
Flashcards
34 cards
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Questions
34
Answers
1
Shana buys a necessary medicine even though the price rises sharply. Shana's behavior shows how
the passage of time affects elasticity.
demand for necessities is inelastic.
luxury goods are not subject to elasticity.
the law of demand eliminates elasticity.
2
In the market for chocolate, disease in cocoa trees reduces the size of the harvest
Demand shifts left
Demand shifts right
Supply shifts left
Supply shifts right
3
When the supply curve shifts right, what happens to market price and quantity?
They both fall
They both rise
Equilibrium Price falls, quantity rises
Equilibrium Price rises, quantity falls
4
In the market for soda, consumers cut back on drinking sugary drinks
Supply shifts right
Demand shifts right
Demand shifts left
Supply shifts left
5
Which of the following is the best example of substitute for movie tickets?
Inferior goods
Jewelry
Rentals of on-demand programming
Takeout pizza
6
When supply shifts to the left, what happens to market price and quantity?
Equilibrium Price rises, quantity falls
They both go down
They both go up
Equilibrium Price falls, quantity rises
7
At a price floor, the market condition that results is called a(n)
Shortage
Surplus
Equilibrium
8
How do subsidies help producers?
They remove regulations
They decrease costs
They increase foreign competition
They increase revenues
9
Rent Control is an example of a(n)
Price Ceiling
Government Input
Subsidy
Price Floor
10
If the demand curve shifts left, what will happen to the market price and quantity?
They both go up
Price rises, quantity falls
They both go down
Price falls, quantity rises
11
In the market for wheat, new technology improves farming and harvesting techniques
Supply shifts left
Demand shifts left
Supply shifts right
Demand shifts right
12
What is the best explanation for the change you see in the supply curve?
Production technology improved
Resource costs rose
Taxes rose
Subsidies to businesses fell
13
Which of the following is true about the market clearing (equilibrium) price?
Quantity supplied is greater than quantity demanded
Quantity demanded is greater than quantity supplied
Quantity demanded equals quantity supplied
14
The increasing age of the American population is an example of how
the law of ceteris paribus works.
demand does not always change when prices change.
changing demographics can cause demand shifts.
lack of substitutes can blunt demand shifts.
15
A change in demand for one good will have what effect on its complement?
No effect
The same effect
Different effects at different times
The opposite effect
16
When demand is elastic, an increase in price will cause revenue to
Rise
Fall
Remain the same
17
What does it mean to say that supply is
unitary elastic
?
A change in supply is observed only if price increases.
Supply does not change with changes in price.
Supply is very sensitive to changes in price.
The percentage change in price and in supply are the same.
18
According to the law of demand, as price rises
Quantity Demanded Goes Up
Quantity Demanded Goes Down
19
In the market for new homes, consumer incomes rise
Supply shifts left
Demand shifts right
Supply shifts right
Demand shifts left
20
iPhones and iPhone Cases are examples of
Substitute Goods
Subsidy Goods
Inferior Goods
Complimentary Goods
21
In economics, the concept of demand is defined as the desire to own something
that has not yet been manufactured or produced.
combined with the ability to pay for it.
and a willingness to pay more than other consumers for it.
that a manufacturer is capable of producing.
22
According to the law of demand, when the price of pizza goes up,
pizza restaurants will stop making pizza.
consumers will buy less pizza.
consumers will save more money.
pizza restaurants will make more money.
23
When compared to Kraft Easy Mac, Winn-Dixie brand Quick Mac and Cheese is an example of a(n)
Inferior Good
Elastic Good
Subsidy
Complimentary Good
24
What action by the government would most likely raise the supply of gasoline in the short term?
Increased purchases of electric vehicles for government use
Reduced taxes on the refining of gasoline
Stricter limits on the size of oil tankers allowed in ports
Greater regulation of gas stations
25
According to the law of supply, as prices fall
Quantity demanded by consumers falls
Quantity supplied falls
Quantity supplied rises
Quantity supplied does not respond
26
What is the effect of lower input costs?
Lower Supply
Decreased marginal costs
Higher revenues
Reduced profits
27
Which factor would shift the supply curve for ethanol in the United States to the right?
An American ban on ethanol from all producers
An excise tax placed by government on ethanol use
Removal of subsidies from government to ethanol producers
Trade agreement with China opening markets to import ethanol
28
A shift in demand has led to a shortage of rice. How can this be resolved most quickly?
By switching to a barter system
By increasing the price of rice
By growing more rice
By allocating rice through rationing
29
Why does demand generally become more elastic over time?
Few substitutes become available.
People don't change their shopping behavior over time.
People buy more products over time.
People have time to find substitutes and change behaviors.
30
A new apple from imported trees is popular with consumers. What does this mean to growers?
Demand for fruits such as apples is elastic in the short run
Supply of fruits like apples is inelastic in the short run.
Supply of fruits such as apples is elastic in the short run.
Demand for fruits like apples is inelastic in the short run.
31
In the market for car tires, the cost producers pay for rubber and steel belting rises
Supply shifts left
Demand shifts left
Supply shifts right
Demand shifts right
32
Which of the following might have caused the demand curve to shift right?
Consumer preferences for the product improved
Consumer income fell
Resource costs dropped
The number of consumers fell
33
Minimum Wage is an example of a(n)
Subsidy
Price Floor
Price Ceiling
Government Input
34
Do higher prices lead to increased revenues for a company?
Always
Never
Sometimes
Only when demand is elastic
