Which of these is the best description of a normal supply curve?

Its slope goes up when the diagram is read from left to right.

Why is a demand curve downward sloping?

because quantity demanded increases as price decreases

A change in quantity demanded is represented by ______

Movement along the demand curve.

Which of these do producers of an item hope to achieve when adopting new technologies?

a shift of the supply curve for that item to the right

Which of these best describes the influence of high prices on the behavior of producers?

High prices are an incentive for producers to produce more.

According to the Law of Supply, which of these would happen to an item as its price rose?

Producers would make more of it.

Which of these names the way in which producers regard taxes?

as part of the cost of production

What is the income effect?

a change in quantity demanded caused by a change in consumer income

Which of these best describes prices in a market economy?

a set of compromises between buyers and sellers

Which of these results from the repeal of an item’s subsidies?

a leftward shift of that item’s supply curve

Which of these describes an effect of increased government regulation on producers?

It shifts their market supply curve to the left.

What happens at the “equilibrium price”?

the number supplied equals the number demanded

Equilibrium is reached when what occurs?

quantity supplied equals quantity demanded

What are the characteristics of demand?

the desire, ability, and willingness to buy a product

Which of these is true of both an individual supply curve and a market supply curve?

change in supplied takes place only when there is a change in price

What is the relationship between income and demand?

An increase in income increases demand.

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Demand, Supply, & Price

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Questions 38

Answers

1
Which of the following replaces a costly item with a less costly one?
the substitution effect
change in demand
the income effect
consumer taste
2
Which of these is the best description of a normal supply curve?
Its slope goes up when the diagram is read from right to left.
Its slope is completely horizontal.
Its slope is mostly horizontal, with occasional vertical fluctuations.
Its slope goes up when the diagram is read from left to right.
3
Why is a demand curve downward sloping?
because quantity demanded increases as price decreases
because of the natural elasticity of the market
because it reflects the desire, ability, and willingness of consumers
because it shows how increasing incentives changes demand
4
A change in quantity demanded is represented by ______
Movement along the demand curve.
Complements.
Substitution.
A shift of the demand curve.
5
Which of these tends to force the price of an item upward?
a shortage of that item
attainment of an equilibrium price for that item
a surplus of that item
attainment of an equilibrium quantity of that item
6
Which of these do producers of an item hope to achieve when adopting new technologies?
a shift of the supply curve for that item to the right
inelasticity of supply of that item
a repeal of subsidies for production of that item
a shift of the supply curve for that item to the left
7
Which of these best describes the influence of high prices on the behavior of producers?
High prices are an incentive for producers to produce more.
High prices influence producers to use fewer raw materials and less labor.
High prices have no significant influence on the behavior of producers.
High prices are an incentive for producers to produce less.
8
Which would an economist consider a likely complement for coffee?
chicken
water
tea
donuts
9
On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___
an increase in demand.
a decrease in demand.
a change in price.
a change in demand.
10
According to the Law of Supply, which of these would happen to an item as its price rose?
Producers would lower the price on similar items.
Producers would make more of it.
Producers would increase the price even more.
Producers would make less of it.
11
Which of these names the way in which producers regard taxes?
as part of the cost of production
as an investment in technology
as an entry in their supply schedule
as an encouragement to productivity
12
What is the income effect?
a proportional change in quantity demanded based on income
a change in demand caused by substitution
a change in quantity demanded caused by a change in consumer income
an increase in purchase of complements based on an increase in income
13
Which of these is the most likely to create a shortage of an item?
a fixed price
a price ceiling
a market price
a price floor
14
Which of these best describes prices in a market economy?
a signal for producers to manufacture less
a signal for consumers to purchase less
a set of compromises between buyers and sellers
a set of compromises between the government and citizens
15
What do most economists believe is the most efficient way to allocate resources?
rationing
government action
distorted incentives
competitive markets
16
Which would an economist consider a likely substitute for coffee?
chicken
tea
donuts
water
17
A supply schedule lists various quantities of a specific product with
possible changes in demand.
possible prices in the market.
possible production expenses.
possible fixed costs.
18
Which of these results from the repeal of an item’s subsidies?
an increase in reliance upon government regulation
a leftward shift of that item’s supply curve
a rightward shift of that item’s supply curve
a decrease in the price of that item
19
Which of these is the most likely to create a surplus of an item?
a market price
a fixed price
a price ceiling
a price floor
20
Which is the opposite of a surplus?
equilibrium
shortage
floor
inelastic
21
Which of these describes an effect of increased government regulation on producers?
It prompts them to increase output at all possible prices.
It shifts their market supply curve to the right.
It shifts their market supply curve to the left.
It encourages production by requiring the use of new technology.
22
What is the main cause of a change in quantity demanded?
substitution
change in price
changes in revenue
the income effect
23
In a competitive market economy, prices are considered
neutral.
uncompromising.
dictated.
favorable.
24
What happens at the “equilibrium price”?
the quantity of sellers is the same as the quantity of buyers
the number supplied equals the number demanded
the price stops changing
the prices are all the same
25
Equilibrium is reached when what occurs?
quantity supplied equals quantity demanded
there is no change in the quantity supplied
prices are inelastic
price increases
26
Which of these tends to force the price of an item downward?
attainment of an equilibrium quantity of that item
a surplus of that item
a shortage of that item
attainment of an equilibrium price for that item
27
Factors that can cause a change in supply include
increased or decreased government subsidies.
technology and government regulations.
increases in the number of sellers and market expectations.
all of the above.
28
What are the characteristics of demand?
the desire and ability to buy a product
the ability and willingness to buy a product
the desire, ability, and willingness to buy a product
the willingness and desire to buy a product
29
Which is a likely complement to a tablet computer?
DVDs
apps
pencils
movie tickets
30
What do price ceilings and price floors prevent?
shortages
prices reaching equilibrium
benefits to consumers
surpluses
31
When the price of something increases, the quantity demanded ____
decreases.
increases.
remains unchanged.
reverses.
32
Which of these is true of both an individual supply curve and a market supply curve?
change in supplied takes place when a change in demand occurs.
change in supplied takes place only when there is a change in price
change in supplied takes place only when the price remains constant
change in supplied takes place when a change in demand is projected
33
What do prices help buyers and sellers make?
products
targets
models
decisions
34
What do low prices signal buyers to do?
buy less
buy more
nothing
substitute
35
Which two terms are the most similar in meaning?
variable costs and overhead
marginal costs and variable costs
fixed costs and overhead
marginal costs and fixed costs
36
What is the relationship between income and demand?
An increase in price increases income.
An increase in income increases demand.
A decrease in income increases demand.
A decrease in price decreases income.
37
Which of these would an item’s producer be most likely to do if total revenue on that item began to drop?
raise the price of that item
produce less of that item
lower the price of that item
produce more of that item
38
A demand schedule is best described as _______
a time line.
charted data.
a graph.
an incentive.

Demand, Supply, & Price Flashcards | StudBud