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Supply and Demand Review
Supply and Demand Review
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1
production expenses that do not change when output changes
marginal cost
variable cost
fixed cost
total cost
2
A demand schedule is best described as:
data
the same as a demand curve
a timeline
an incentive
3
Why is a demand curve downward sloping?
because it shows how increasing incentive changes demand
because quantity demanded increases as price decreases
because it reflects the desire, ability and willingness of consumers
because as price decreases the quantity demanded will decrease
4
The market demand curve that shows the ____by everyone who is interested in purchasing a product at all possible prices.
marginal utility
quantities demanded
incentive
ability
5
What is the main cause of a change in quantity demanded?
Change in revenue
price
the income effect
substitution
6
A graph that depicts the quantities demanded at all prices for a particular market is called a__________.
demand curve
demand schedule
market demand curve
demand chart
7
"diminishing marginal utility" means the extra satisfaction we get from using additional quantities of the product
remains the same
begins to decrease
changes inversely
begins to increase
8
Which is a complement to bread?
butter
wheat bread
hotdog buns
knife
9
As people use more and more of a product, they encounter diminishing marginal utility.
True
False
10
Portion of a change in quantity demanded caused by a change in the consumer’s income when the price of a product changes
Income effect
Substitution effect
Complements
Substitutes
11
The amount of product that would be offered for sale at all possible prices in the market is
demand schedule
supply
demand
supply schedule
12
products related in such a way that increase in price of one reduces the demand for the other
law of demand
complements
Substitution effect
marginal utility
13
At which stage of production does the concept of “diminishing returns” first become significant
It is significant throughout the production process.
Stage II
Stage I
Stage III
14
Changes in quantity demanded and changes in price have a(n) _____ relationship.
neutral
positive
inverse
indirect
15
According to the Law of Supply, which of these would happen to an item as its price rose?
Producers would increase the price even more.
Producers would lower the price on similar items.
Producers would make more of it.
Producers would make less of it.
16
If the price of a product decreases, you would expect the demand for the product to ____________.
all of the above
decrease
increase
stay the same
17
Which of the following replaces a costly item with a less costly one?
change in demand
the income effect
consumer taste
the substitution effect
18
When the price of something increases, the quantity demanded...
increases
decreases
buys everyone pizza
remains the same
19
A short is most likely to be used by a small business to make decisions about______
Allocation of resources
Prices
Hiring and firing of employees
Advertising
20
A change in quantity demanded is represented by_
shift in the demand curve
Movement along the demand curve
substitutes
compliments
21
Products related in such a way that an increase in the price of one increases the demand for the other
Change in demand
Complements
Income effect
Substitutes
22
Why might a producer’s introduction of a new technology result in a brief shift of a product’s supply curve to the left?
There may be an increase in output despite the same amount of input
There may be a period of adjustment to that technology
That technology may increase production more rapidly than expected
That technology may reduce production costs
23
Which stage of production is distinguished by negative marginal returns?
Stage II
Stage I
Negative marginal returns are part of production process.
Stage III
24
Which of these describes an effect of increased government regulation on producers?
It shifts their market supply curve to the right.
It encourages production by requiring the use of new technology.
It prompts them to increase output at all possible prices.
It shifts their market supply curve to the left.
25
Which term is generally associated with machines and other capital goods?
total cost
fixed cost
variable cost
marginal cost
26
Why is the Law of Demand called a “law”?
because it is an economic term
because it is legally required
because can be demonstrated repeatedly
because there are no exceptions
27
____ shows quantities offered at various prices by firms that sell a product in a given market.
supply curve
market supply curve
supply schedule
demand curve
28
Movement along the demand curve showing that a different quantity is purchased in response to a change in price
Law of Demand
Change in quantity demanded
Demand
Demand Curve
29
Which of these do producers of an item hope to achieve when adopting new technologies?
a repeal of subsidies for production of that item
decrease in taxes
a shift of the supply curve for that item to the left
a shift of the supply curve for that item to the right
30
Prices act as a motivating influence, or ____________________ , that causes an individual to take action.
ability
incentive
quantities demanded
marginal utility
31
What is the relationship between income and demand?
an increase in income increases demand
a decrease in income increases demand
an increase in price increases income
a decrease in price decreases income
32
Which of these measures determines the three stages of production?
marginal product
total product
supply schedule
change in supply
33
Demand is the desire, ____________________, and willingness to buy a product or service.
incentive
ability
marginal utility
quantities demanded
34
True or False: When inflation occurs, consumers can't buy the same amount of goods at the price they did previously.
False
True
35
Which stage(s) of production are distinguished by increases in output?
Stage 1
Stages 1 and 2
Stages 1, 2, and 3
Stages 2 and 3
36
Which of these best describes the influence of high prices on the behavior of producers?
High prices tell producers to use fewer materials and labor.
High prices have no influence on the behavior of producers.
High prices are an incentive for producers to produce less.
High prices are an incentive for producers to produce more
37
Different amounts demanded at every price, causing the demand curve to shift to the left or the right
income effect
change in demand
substitutes
change in quantity demanded
38
Production period so brief that only variable inputs (usually labor) can be changed.
diminishing marginal returns
supply
long run
short run
39
Production period lengthy enough to change amount of all inputs used in production
all run
short run
no run
long run
40
Satisfaction or usefulness obtained from acquiring one or more unit of a product.
quantities demanded
ability
incentive
marginal utility
