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Supply & Demand
Supply & Demand
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An economics Quiz to explain the basics of Supply and Demand
Flashcards
23 cards
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Practice quiz
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Questions
23
Answers
1
When a market is in equilibrium
Quantity demanded equals quantity supplied
The market is cleared by the equilibrium price
All of the above
Excess demand and excess supply are zero
2
If good A and good B are perfect complements, which combination is the most preferable?
A, 1 B
A, 4 B
A, 10 B
A, 3 B
3
A supply curve is directly affected by
all of the above
input costs
government regulation
technology
4
An increase in price will cause a supply curve to shift to the left
True
False
5
________ and ________ do not directly affect the demand curve
the price of related goods, consumer incomes
the costs of production, bank opening hours
consumer incomes, tastes
the price of related goods, preferences
6
A ceiling price of $15 would cause…
a surplus of 600.
a shortage of 800.
a surplus of 800.
a shortage of 600.
7
If input prices increase, all else equal
demand will decrease.
quantity supplied will decrease.
supply will decrease.
supply will increase.
8
Supply is the quantity of a good sellers wish to sell each time the market opens
False
True
9
If the price of a complement increases, all else equal,
quantity supplied will increase.
quantity demanded will increase.
demand will increase.
demand will decrease.
10
Which of the following will cause a change in quantity supplied?
A change in the market price of the good.
A change in the number of firms in the market.
Technological change.
A change in input prices.
11
Which of the following would lead to an INCREASE in the demand for golf balls?
An decrease in the price of golf balls.
An increase in household income, they're a normal good
A decrease in the cost of producing golf balls.
none of the above
12
An increase in consumer income will increase demand for a ____ but decrease demand for a ____
substitute good, inferior good
normal good, complementary good
inferior good, normal good
normal good, inferior good
13
Which of the following would decrease the supply of wheat?
An increase in the demand for wheat.
A decrease in the price of pesticides.
none of the above
An increase in the price of corn.
14
When we know the quantity of a product that buyers wish to purchase, we know?
excess supply
excess demand
Supply
Demand
15
If a price increase of good A increases the quantity demanded of good B, then good B is a
complementary good
substitute good
inferior good
bargain
16
A floor price of $30 would cause…
a surplus of 400.
a shortage of 400.
a shortage of 150.
a surplus of 150.
17
Which of the following could remedy a shortage caused by a price ceiling?
Outward shift of the supply curve
Outward shift of demand and inward shift of supply
Outward shift of the demand curve
Inward shift of the supply curve
18
What do you need to optimize a buyer's utility?
Budget constraint and price
Supply curve and demand curve
Price and quantity
Budget constraint and indifference curves
19
What do you need to optimize a seller's profit?
Total Variable Costs, Total Fixed Costs, Marginal Cost
Price, Marginal Revenue, and Average Revenue
Price, Average Cost, and Marginal Revenue
Price, Marginal Cost, and Average Cost
20
The equilibrium price clears the market; it is the price at which ________ _________
b and c
quantity demanded equals quantity supplied
excess demand is zero
Everything is sold
21
A demand curve can shift because of changing
incomes
all of the above
tastes
prices of related goods
22
When the supply curve shifts outwards, what is the effect on equilibrium price and quantity?
Price increases, quantity decreases
Price increases, quantity increases
Price decreases, quantity decreases
Price decreases, quantity increases
23
Price ceilings are imposed increase price above the free market equilibrium price
False
True
