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Demand & Supply
Demand & Supply
30 terms
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StudBud Administration
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Review of basic demand and supply concepts.
Flashcards
30 cards
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Practice quiz
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Questions
30
Answers
1
What usually occurs when new technology is applied to the production of a good?
the supply of the good increases
the demand for the good increases
the supply of the good decreases
the government will intervene to maintain competition
2
Rent control would be an example of
rationing
price floors
price ceilings
market failures
3
Which of the following will NOT cause a change in the demand for a particular good?
a change in the price of a substitute good
income level of consumers
a change the price of the good
an increase in the number of consumers
4
A business maximizes its profit when it produces the quantity where
total revenue is the highest.
marginal revenue is the greatest.
marginal revenue equals marginal cost.
marginal cost is the lowest.
5
Minimum wage is an example of a
rationing
black market
price floor
price ceiling
6
If the government wants to increase the amount of a good that is produced, it will
give producers of the good a subsidy.
apply an excise tax to the sale of the good.
pass a law requiring the firms to produce the good.
place a tariff on the import of the good.
7
A payment from the government to encourage supply and production is called
a subsidy
a regulation
a tax
a price ceiling
8
Which of the following is the correct formula for calculating profit?
profit = marginal revenue - variable costs
profit = total revenue - total cost
profit = marginal revenue - marginal cost
profit = total revenue
9
producers are motivated by
law of supply
profit motive
customer service
law of demand
10
If your income increases and you buy less ramen noodles, then ramen noodles are
substitute goods.
normal goods.
complementary goods.
inferior goods.
11
A table that shows all of the possible quantities demanded at different prices is a
demand chart.
demand chart.
demand schedule.
demand curve.
12
According to the law of demand, if the price of a good increases, then
demand will decrease.
quantity demanded will decrease.
supply will increase.
quantity supplied will decrease
13
The ________ motivates businesses to produce goods and services
revenue incentive
customer happiness
profit incentive
government taxation
14
A cost that does NOT change depending on the amount of production is called
total cost
fixed cost
variable costs
marginal cost
15
You expect the price of gasoline to increase tomorrow, so fill up today. This is an example of
the income effect.
market size.
consumer expectations.
government regulation.
16
The additional revenue that a business earns from selling one more unit of a good
marginal revenue
total revenue
profit
marginal cost
17
Which of the following is NOT a determinant of DEMAND?
PORG
Income
Market Size
Technology
18
A supply curve
slope upward from left to right.
has a positive slope.
is a graphic representation of a supply schedule.
all of the above are correct.
19
If good X and good Y both satisfy the same need or want then they are
complementary goods.
inferior goods.
substitute goods.
normal goods.
20
Which is the best example of the law of supply
A restaurant purchases a new oven
A citrus farmer doubles his land
Perdue Chicken opens a new factory
A pizzeria increases slices as price increases
21
Which of the following statements about demand curves is NOT correct?
It slopes upward from left to right.
It illustrates the inverse relationship between P and QD.
It is a graphic representation of a demand schedule.
22
Which of the following is a determinant of Supply?
market size
price of resources
income
consumer tastes and preferences
23
Which of the following is NOT a determinant of SUPPLY?
Competition
Price of Related Goods
Price of Resources
Market Size
24
Income effect affects...
quantity demanded
quantity supplied
demand
supply
25
If a firm expects the price of their goods to increase in the future, then it will
decrease the current supply.
increase the current supply.
change what it produces.
seek a patent for its products.
26
If the price of Good A increases and the demand for Good B increases then they are considered
complementary goods.
substitute goods.
inferior goods.
normal goods.
27
Jet fuel by a airline would be considered...
marginal cost
total costs
variable cost
fixed cost
28
Diminishing marginal utility means that each additional unit of a good consumed will have
not change the total of consuming the good.
less additional benefit than the previous unit.
decrease the total benefit of consuming the good.
the same additional benefit as the previous unit.
29
Which of the following is a determinant of Demand?
price of resources
technology
consumer tastes and preferences
competition
30
Shortages and surpluses would be examples of
price wars
balance
disequilibrium
equilibrium
