Demand and Supply Quiz

1
Demand and Supply Quiz
2
True or False

• According to the law of demand, the price of a
  good influences the amount people will choose to
  purchase.

True

• As price rises less quantity will be demanded

3
Multiple Choice

• The law of demand claims there is an inverse
  relationship between
• price and quantity demanded.
• price and income.
• income and quantity supplied.
• income and quantity demanded.

Inverse means opposite. As one increases the
other decreases as one decreases the other
increases.
4
True or False

• The law of supply states that more of a good will
  be supplied the higher its price, other things
  constant.

True The higher price provides the incentive for
increased production
5
Multiple Choice

• If the price of Pepsi products increases and the
  price of Coke products remains the same,
  individuals will
• consume more Pepsi products.
• substitute Coke products for Pepsi products.
• continue to consume both products with no change.
• consume less Coke and Pepsi products.

6
True or False

• A change in consumers preferences for a product
  will cause a change shift in the demand curve
  for that product.

True A change in preferences creates a whole new
relationship between price and quantity demanded
for a product.
7
Multiple Choice

• The use of the phrase others things equal in
  supply and demand analysis indicates that
• an equilibrium price has been reached.
• an equilibrium quantity has been reached.
• factors other than the one under consideration
  are kept constant.
• we are considering all the changes that might
  take place in actual markets.

8
True or False

• A change in consumers income level would cause a
  change shift in the demand curve for normal
  economic goods.

True If income rises then the demand for normal
economic goods increases. This is seen as a
shift to the right of the demand curve.
9
Multiple Choice

• Which of the following will not cause a change
  shift in the demand for college textbooks?

• A change in income.
• A change in the number of students enrolled in
  college courses.
• A change in the number of textbooks required per
  course.
• A change in the price of textbooks.

10
True or False

• The blue downward sloping curve represents a
  normal supply curve.

Price
6 4 2
False This is a normal slope for a demand curve
Higher price and lower quantity demanded
0
1 3 5 7 9
Quantity
11
True or False

• The green upward sloping curve represents a
  normal supply curve.

Price
6 4 2
True This is a normal slope for a supply curve
Higher price and higher quantity supplied
0
1 3 5 7 9
Quantity
12
Multiple Choice

• The point of intersection for demand and supply
  curves is called
• check point
• equilibrium point
• lookout point
• balance point

Price
4
0
5
Quantity
13
Multiple Choice

• If consumers income rises and all else is
  constant, the
• demand curve shifts left.
• supply curve shifts left.
• demand curve shifts right.
• supply curve shifts right.

Price
s
4
d
d
0
5
Quantity
14
Multiple Choice

• If consumers income falls and all else is
  constant, the
• demand curve shifts left.
• supply curve shifts left.
• demand curve shifts right.
• supply curve shifts right.

Price
s
d
0
Quantity
15
Multiple Choice

• Suppose you are offered a job in the campus
  library for 5 per hour and you decline. When
  the wage is increased to 10 per hour you accept.
  The economic law applied is
• Law of demand
• Law of supply
• Law of omerta
• Law of comparative advantage