SUPPLY

1
SUPPLY DEMAND
2
1. If the price of a good increases,

• a. consumers will demand a lower quantity
• b. supply will increase
• c. supply will decrease
• d. demand will decrease
• e. producers will supply a lower quantity

3
2. The relationship between price and quantity
demanded is graphically illustrated by the

• a. demand curve
• b. demand table
• c. demand schedule
• d. demand graph
• e. demand chart

4
3. A table showing the relationship between the
price of a good and quantity supplied is called a

• a. supply table
• b. supply curve
• c. supply graph
• d. supply chart
• e. supply schedule

5
4. The law of supply states that the relationship
between price and quantity supplied is

• a. categorical
• b. direct
• c. converse
• d. indirect
• e. inverse

6
5. The law of demand states that the relationship
between price and quantity demanded is

• a. categorical
• b. inverse
• c. indirect
• d. converse
• e. direct

7
6. An increase in demand is represented by a(n)

• a. movement down the demand curve
• b. movement up the demand curve
• c. increase in the slope of the demand curve
• d. rightward shift of the demand curve
• e. leftward shift of the demand curve

8
7. A decrease in the price of inputs will cause

• a. movement along the supply curve
• b. the supply curve to shift right
• c. the demand curve to shift left
• d. the supply curve to shift left
• e. the demand curve to shift right

9
8. An increase in the price of a complement good
will cause

• a. movement along the demand curve
• b. the demand curve to shift left
• c. the supply curve to shift right
• d. the supply curve to shift left
• e. the demand curve to shift right

10
9. An increase in the price of a substitute good
will cause

• a. the supply curve to shift left
• b. movement along the demand curve
• c. the demand curve to shift left
• d. the supply curve to shift right
• e. the demand curve to shift right

11
10. An increase in the number of buyers will cause

• a. the supply curve to shift left
• b. the demand curve to shift right
• c. the supply curve to shift right
• d. movement along the demand curve
• e. the demand curve to shift left

12
11. An increase in the rate of interest paid to
capital causes

• a. the supply curve to shift left
• b. the supply curve to shift right
• c. the demand curve to shift right
• d. movement along the supply curve
• e. the demand curve to shift left

13
12. An increase in price will cause

• a. the demand curve to shift right
• b. the supply curve to shift right
• c. the demand curve to shift left
• d. the supply curve to shift left
• e. movement along the supply curve

14
13. An increase in supply will

• a. decrease price and quantity
• b. have no effect on market equilibrium
• c. increase price and quantity
• d. decrease price and increase quantity
• e. increase price and decrease quantity

15
14. A decrease in demand will

• a. increase price and quantity
• b. decrease price and quantity
• c. decrease price and increase quantity
• d. have no effect on market equilibrium
• e. increase price and decrease quantity

16
15. A war with Iran shuts down oil shipments from
the Middle East. In the market for oil,

• a. price decreases and quantity increases
• b. the equilibrium is unaffected
• c. price and quantity increase
• d. price increases and quantity decreases
• e. price and quantity decrease

17
16. In the market for tangerines, an increase in
the price of oranges will

• a. increase price and decrease quantity
• b. have no effect on market equilibrium
• c. decrease price and quantity
• d. increase price and quantity
• e. decrease price and increase quantity

18
17. Researchers develop a new breed of cow that
greatly increases milk production. In the market
for ice cream,

• a. price decreases and quantity increases
• b. price increases and quantity decreases
• c. price and quantity decrease
• d. price and quantity increase
• e. the equilibrium is unaffected

19
18. In the market for tennis balls, a decrease in
the price of tennis rackets will

• a. have no effect on market equilibrium
• b. increase price and quantity
• c. decrease price and increase quantity
• d. decrease price and quantity
• e. increase price and decrease quantity

20
19. A new study links consumption of apples to
decreased risk of heart disease. In the market
for apples,

• a. the equilibrium is unaffected
• b. price and quantity increase
• c. price and quantity decrease
• d. price increases and quantity decreases
• e. price decreases and quantity increases

21
20. In the market for chocolate bars, a decrease
in the price of cacao beans will

• a. decrease price and quantity
• b. increase price and decrease quantity
• c. decrease price and increase quantity
• d. have no effect on market equilibrium
• e. increase price and quantity