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Supply and Demand
Supply and Demand
20 terms
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Ch 7
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
How does an increase in consumer population affect the demand for most products?
demand increases
demand decreases
. prices go down
prices go up
2
. Prices on goods and services are determined
only by supply
only by demand.
neither by demand nor supply
both by demand and supply.
3
The use of technology to produce and distribute goods will
move the supply curve to the left.
increase supply.
decrease supply.
not affect supply
4
A decrease in the demand for a good together with an increase in supply would cause
a surplus of the good.
an increase in production.
a shortage of the good.
the equilibrium price to be reached.
5
When quantity supplied and quantity demanded increase due to improved technology
prices will decrease.
prices will increase.
manufacturers will stop making the product.
consumers will stop buying the product.
6
A shift to the left in the demand curve indicates a(n)
increase in demand.
decrease in price.
decrease in demand.
increase in population.
7
When a market economy operates without restriction, it
creates shortages.
raises prices
creates surpluses.
eliminates shortages and surpluses.
8
If two products are complementary goods, how will a decrease in price of one affect the other?
Price will decrease.
Demand will increase.
Demand will decrease.
Price will increase.
9
The substitution effect, if two items satisfy the same need and the price of one rises,
people will buy something else.
people will buy more of the higher-priced item.
the demand will go up.
people will buy more of the lower-priced item.
10
According to the law of supply, as the price rises for a good
consumers stop buying it.
quantity supplied decreases
quantity supplied increases.
manufacturers stop producing it.
11
In economic terms, the marketplace
exists only at the local level
exists only at the national level
operates through voluntary exchange
is a place where people buy food
12
Which reflects the inverse relationship between quantity demanded and price?
As the price goes down, quantity demanded goes up.
As the supply goes up, the price goes up.
As the price goes up, quantity demanded goes up.
As the supply goes up, the demand goes up.
13
The interaction of supply and demand determines the
marginal utility.
elasticity.
equilibrium price
price ceiling.
14
The law of diminishing returns results in
an increase in the total output of goods at a reduced rate
a decrease in the total output of goods
additional workers increasing the total output of goods
lower costs for expanding production.
15
In a black market, goods are traded
at very low prices
at the equilibrium price.
at illegally high prices
for ration coupons.
16
When a product becomes a fad, the demand curve for that product
slopes upward.
shifts to the left.
becomes a straight line.
shifts to the right.
17
A government-set maximum price that can be charged for a good or service is
a price ceiling.
a price floor.
rationing.
an equilibrium price.
18
Which of the following goods has inelastic demand?
a particular brand of coffee
Diet Coke
sugar
T-bone steak
19
The amount of goods and services people can actually buy is their
utility.
substitution effect.
voluntary exchange.
purchasing power.
20
rule states that satisfaction people get from one more unit will lessen with each unit they get
substitution effect
real income effect
law of diminishing marginal utility
law of demand
