Demand Supply Test

Question 1

If you were to graph a demand schedule, the demand curve would

Accepted Answer

Slope downward from left to right

Question 2

Suppose the price of shampoo continues to rise. Show what will happen to the overall supply by drawing the supply curve

Accepted Answer

It moves to the top of the s1 curve.

Question 3

The additional costs of producing one more unit of output are called

Accepted Answer

marginal costs

Question 4

What will happen to the demand curve for bagels and donuts after articles discuss how unhealthy these are.

Accepted Answer

Demand shifts to the left

Question 5

An increase in the price of milk causes a decrease in the demand for cereal. The two products are

Accepted Answer

Complements

Question 6

1. The Law of Demand states that more of a product will be purchased at low prices than at high ones.

Accepted Answer

True

Question 7

1. A desire and ability to buy a product is the only requirement needed for demand to exist.

Accepted Answer

True

Question 8

If new pollution controls are imposed on companies that make wrenches, the supply of wrenches will

Accepted Answer

Decrease

Question 9

What is the number one determinant of the elasticity of supply?

Accepted Answer

Time

Question 10

If an increase in price causes a proportionally larger change in output, supply is

Accepted Answer

elastic

Question 11

A business makes a profit when its revenues are greater than its

Accepted Answer

total costs

Question 12

Cubs win the World Series. Predict (what do you think will happen with Cubs gear?

Accepted Answer

Demand shifts to right

Question 13

An increase in the supply of a product, the supply curve shifts to the

Accepted Answer

right

Question 14

A market is anywhere a buyer and seller are making a voluntary exchange. T or F

Accepted Answer

True

Question 15

What happens when technology improves the way something is made?

Accepted Answer

Supply cruve shifts to the right

Question 16

What would cause the supply curve to shift to the left?

Accepted Answer

Taxes increased

Question 17

New technology makes the production of CDs more efficient and less expensive. How will this affect the supply of CDs?

Accepted Answer

Supply will increase

Question 18

When a customer’s need for a product is not urgent and can be delayed, demand tends to be

Accepted Answer

Elastic

Question 19

Consumers’ willingness to replace a costly item with a less costly (but similar) item is an example of

Accepted Answer

The substitution effect

Question 20

The amount of a product that would be offered for sale at all possible prices in a market is called

Accepted Answer

Supply

Questions 20