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Supply & Demand
Supply & Demand
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An economics Quiz to explain the basics of Supply and Demand
Flashcards
25 cards
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Practice quiz
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Questions
25
Answers
1
If a price increase of good A increases the quantity demanded of good B, then good B is a
inferior good
complementary good
substitute good
bargain
2
If input prices increase, all else equal
quantity supplied will decrease.
supply will increase.
supply will decrease.
demand will decrease.
3
In a competitive market, marginal revenue is equal to which of the following?
Average Cost
Profit
Average Variable Cost
Marginal Utility
4
An increase in price will cause a supply curve to shift to the left
True
False
5
A supply curve is directly affected by
all of the above
government regulation
input costs
technology
6
What do you need to optimize a seller's profit?
Total Variable Costs, Total Fixed Costs, Marginal Cost
Price, Average Cost, and Marginal Revenue
Price, Marginal Cost, and Average Cost
Price, Marginal Revenue, and Average Revenue
7
If the price of a complement increases, all else equal,
demand will increase.
quantity supplied will increase.
demand will decrease.
quantity demanded will increase.
8
Supply is the quantity of a good sellers wish to sell each time the market opens
False
True
9
When a market is in equilibrium
Excess demand and excess supply are zero
All of the above
The market is cleared by the equilibrium price
Quantity demanded equals quantity supplied
10
The equilibrium price clears the market; it is the price at which ________ _________
quantity demanded equals quantity supplied
excess demand is zero
b and c
Everything is sold
11
A demand curve can shift because of changing
incomes
prices of related goods
all of the above
tastes
12
When the supply curve shifts outwards, what is the effect on equilibrium price and quantity?
Price decreases, quantity decreases
Price increases, quantity decreases
Price increases, quantity increases
Price decreases, quantity increases
13
________ and ________ do not directly affect the demand curve
the price of related goods, consumer incomes
the price of related goods, preferences
the costs of production, bank opening hours
consumer incomes, tastes
14
Price ceilings are imposed increase price above the free market equilibrium price
False
True
15
Which of the following is something indifference curves can never do?
Not curve at all
Curve towards the origin
Cross
Have an upwards slope
16
Which of the following will cause a change in quantity supplied?
A change in the number of firms in the market.
A change in input prices.
Technological change.
A change in the market price of the good.
17
Which of the following would lead to an INCREASE in the demand for golf balls?
A decrease in the cost of producing golf balls.
An decrease in the price of golf balls.
An increase in household income, they're a normal good
none of the above
18
Which of the following could remedy a shortage caused by a price ceiling?
Outward shift of the supply curve
Inward shift of the supply curve
Outward shift of demand and inward shift of supply
Outward shift of the demand curve
19
If good A and good B are perfect complements, which combination is the most preferable?
A, 10 B
A, 3 B
A, 4 B
A, 1 B
20
An increase in consumer income will increase demand for a ____ but decrease demand for a ____
normal good, inferior good
normal good, complementary good
substitute good, inferior good
inferior good, normal good
21
What do you need to optimize a buyer's utility?
Budget constraint and price
Supply curve and demand curve
Budget constraint and indifference curves
Price and quantity
22
A floor price of $30 would cause…
a surplus of 400.
a shortage of 150.
a surplus of 150.
a shortage of 400.
23
Which of the following would decrease the supply of wheat?
A decrease in the price of pesticides.
An increase in the price of corn.
An increase in the demand for wheat.
none of the above
24
A ceiling price of $15 would cause…
a shortage of 800.
a surplus of 800.
a surplus of 600.
a shortage of 600.
25
When we know the quantity of a product that buyers wish to purchase, we know?
excess supply
Demand
Supply
excess demand
