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Supply & Demand
Supply & Demand
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Review for Unit 2 Test on the topics of #supply and #demand
Flashcards
30 cards
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Practice quiz
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Host live
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Questions
30
Answers
1
According to the demand schedule and diagram, if P=$4.50 how many units would be demanded?
62.50
60
67.50
65
2
With this shift, what happens to equilibrium price and quantity?
Pe increases and Qe decreases
Pe and Qe both increase
Pe decreases and Qe increases
Pe and Qe both decrease
3
Which is likely to result in movement along the demand curve for iPhones?
An advertising campaign for iPhones
A rise in the price of other cell phones
A fall in people's income
An increase in taxes on the production of all iPhones
4
Which of the following would cause a shift in the demand curve from point A to B?
A decrease in income (inferior good).
An increase in income (normal good).
All of the above
An increase in the price of a substitute good.
5
Equilibrium price is best defined as the price at which
When quantity supplied is equal to quantity demanded
When quantity demanded is less than quantity supplied
When supply is equal to demand
When price and quantity are equal
6
According to the demand schedule and diagram, if P=$4 how many units would be demanded?
65
70
60
67.50
7
If Q
D
is represented by column 2 and Q
s
is represented by column 5, Pe and Qe will be
$8 and 60 units
$7 and 50 units
$10 and 60 units
$9 and 50 units
8
Which of the following events would cause the supply curve to change from S₁ to S₂?
An increase in the number of firms in the market
A decrease in the price of inputs
An increase in the price of inputs
Lower expected future prices.
9
Which of the following will
NOT
cause the demand for some Product X to change?
An increase in consumer incomes
A change in consumer tastes
A change in the price of Product X
A change in the price of substitute Product Y
10
According to the diagram, a surplus of 160 units would occur if price was:
$1.10
$1.60
$1.00
$0.50
11
What would cause the supply curve for carrots to shift to the right?
The price of farmland falls
The price of carrots rises
The consumption of carrot cake rises
The price of farm machinery rises
12
Which of the following events would shift the
supply
of smart phones to the right?
A decrease in the price of smart phones
An increase in the expected future price of smart phones
A decrease in the price of inputs used to make smart phones
All of the above
13
The price elasticity of demand (PED) of a product is likely to be greater if...
The proportion of one’s income spent on the product is small
There is more time for buyers to adjust to a price change
The number of substitute products available is smaller
The product is a necessity rather than a luxury
14
Which of the following would cause a shift in the demand curve from point A to C?
An increase in income (normal good).
A decrease in the price of a substitute good.
Future price is expected to increase
All of the above
15
Which would be most likely to cause the demand for motorcycles to increase?
A rise in gas prices
An increase in public transportation prices
A fall in the price of motorcycles
A rise in the cost of insurance
16
According to the diagram, an increase in quantity supplied (due to a price change) is shown by:
Shift from S1 to S2
Shift from S2 to S1
Movement from point y to point x
Movement from point x to point y
17
Which of the following would likely cause movement from point A to C?
A fall in the price of french fries, a complementary good
The expectation of a higher future price for wings.
A rise in vegetarianism
An increase in the number of buyers
18
A hurricane decreases the production of sugar. What will likely happen to the price of sugar?
Increase
Not enough information
Decrease
Stay the same
19
One reason that quantity demanded of a good increases when its price falls is that the
Lower prices make consumers feel richer so they buy more
Lower price shifts the demand curve to the right
Price decline shifts the supply curve to the left
Lower price shifts the demand curve to the left
20
If the demand for Product B increases as the price of Product A declines, then...
A and B are substitute goods
A is a normal good and B is an inferior good
Both A and B are inferior goods
A and B are complementary goods
21
Suppose for prices in column 3, Q
D
is column 2 and Q
s
is column 5. If P=$9, then...
The market would clear
A surplus of 20 units would occur
A shortage of 20 units would occur
QD would change to column 1
22
The demand curves shown represent demand for wings. Moving from point A to B on D
1
is caused by
A decrease in the price of traditional wings.
An increase in the price of french fries
A decrease in buyer incomes
An increase in the price of traditional wings
23
If supply and demand both decrease, then...
Qe must fall and Pe must rise
Qe and Pe must both decline
Qe must fall, but Pe may rise, fall or remain unchanged
Pe must fall, but Qe may rise, fall or remain unchanged
24
Which would cause the price of oranges to rise without a shift of its demand curve?
An increase in the cost of harvesting oranges
An increase of consumer income
A fall in the price of agricultural land
An increase in the popularity of oranges
25
Other things equal, which of the following might shift the demand curve for gas to the left?
An increase in the price of train and air transportation
The development of a low-cost electric car
A large decline in the price of cars
The discovery of vast new oil reserves in Montana
26
According to the diagram, a decrease in supply is depicted by:
Movement from point x to point y
Movement from point y to point x
Shift from S2 to S1
Shift from S1 to S2
27
According the the diagram, when demand increases, what will occur at the
original
price?
Shortage
Surplus
New equilibrium
Scarcity
28
If PED of pencils is equal to 1.2, what term best describes its elasticity?
Elastic
Unit elastic
Inelastic
Perfectly inelastic
29
If the government imposes a price ceiling of $2, the result will be a:
Supply decrease
Surplus
Shortage
Demand increase
30
According to the Law of Supply...
Quantity supplied is not responsive to price changes
There is an inverse relationship between price and QS
As the price of a product increases, firms will supply more
As the price of a product increases, firms will supply less
