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Demand-supply
Demand-supply
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Answers
1
An increase in the supply of petrol could be caused by which
two
of the following:
New technology reducing the costs
New oil fields being discovered
Existing fields running dry
An effective blockade of oil terminals
2
An inferior good is a good:
That more people buy when it is advertised more
That most people do not buy because it isof lower quality
That more people buy when its price goes down
That is bought in smaller amounts when income rise
3
The law of demand states that price and quantity demanded are
directly related, ceterisparibus.
independent.
positively related, ceterisparibus.
inversely related, ceteris paribus.
4
On a supply-and-demand diagram, equilibrium is found
where the demand curve intercepts the horizontal axis.
at every point on either curve
where the supply curve intercepts the vertical axis.
where the demand and supply curves intersect.
5
A surplus can be eliminated by:
Allowing the price to fall
Increasing supply
Government raising the price
Decreasing the quantitydemanded
6
If the demand for coffee decreases as income decreases, coffee is:
A normal good
A complementary good
A substitute good
An inferior good
7
All of the following are determinants of supply except :
Level of technology
Objectives of the firm
Income levels
Weather
8
Which of the following will
not
shift a supply curve?
change in per-unit costs brought about by a change in taxes
a change in the good's own price
a change in the price of relevant resources
a change in the number of sellers
9
A rightward shift in the demand curve for tennis balls could be caused by
a fall in the price of tennis rackets.
a fall in the price of tennis balls.
a fall in income, assuming tennis balls are a normal good.
a rise in the price of tennis lessons.
10
When people’s income increases this will cause an increase in demand for all goods
True
False
11
Which of the following will not cause a shift in the demand curve for chicken?
None of them
A change in the price of beef
A change in the price of chicken
A change in income
12
If people begin to favor novels to a greater degree than previously, the demand curve
can shift either rightward or leftward.
shifts leftward.
shifts rightward
stays constant.
13
An advance in technology causes
a leftward shift in thedemand curve.
a rightward shift in thedemand curve.
a rightward shift in thesupply curve.
a leftward shift in thesupply curve.
14
The law of supply states that price and quantity supplied are
not related.
fixed.
directly related, ceterisparibus.
inversely related, ceterisparibus.
15
An increase in price of A results in an increase in demand for B,the 2 goods are complements
True
False
16
Surpluses and shortages are temporary conditions in freely operating markets
True
False
17
Gin and tonic water are often bought together. A fall in the price of gin will:
Increase the demand for gin and tonic water
Increase the supply of tonic water
Increase the demand for tonic water
Increase the demand for gin
18
The most likely cause of a decrease in demand for cameras is:
A decrease in the price of cameras
A decrease in the price of a complementary good
An increase in the price of a complementary good
An increase in the price of a substitute good
19
An "increase in the quantity demanded" means that
given supply, the price ofthe good can be expected to rise.
price has declined andconsumers therefore want to buy more
the demand curve has shifted to the right.
the supply curve has shifted to the left.
20
If Max's demand for hot dogs falls as his income rises, then for Max hot dogs are
a substitute good.
a normal good.
an inferior good.
a complementary good
