Deck 4: Supply and Demand: an Initial Look

Question 1

A change in the price of hamburgers will change the supply of hot dogs.

Answer 1

False

Question 2

Governments of market-oriented economies never tamper with the price mechanism.

Answer 2

True

Question 3

George Washington's troops at Valley Forge were almost destroyed by price controls.

Answer 3

True

Question 4

A report on the dangers of cholesterol would likely shift the demand curve for beef downward and to the left.

Question 5

A demand schedule's position is determined partly by the supply of a good.

Question 6

A change in the income of buyers will normally change demand.

Question 7

Very few societies have used price controls.

Question 8

Demand and quantity demanded are the same thing.

Question 9

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Question 10

Change in the price of a good causes the demand schedule for that good to shift.

Question 11

A decrease in the price of VCRs will increase demand for video cassettes.

Question 12

A cold winter will increase the quantity of heating fuel demanded at every price.

Question 13

A demand schedule relates prices of a particular good to quantities demanded.

Question 14

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Question 15

If the demand curve shifts outward and the supply curve remains the same, price will fall.

Question 16

A demand schedule shows the time over which different quantities will be demanded.

Question 17

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

Question 18

The laws of supply and demand did not apply to elephant tusks.

Question 19

An increase in price will decrease demand.

Question 20

"Demand" is a series of quantities demanded, one for each person in the market.

Question 21

When people suddenly want to buy something, supply increases.

Question 22

An increase in price will increase supply.

Question 23

A supply curve slopes upward because quantity supplied is higher when price is higher.

Question 24

Advertising has no effect on the demand schedule for a good.

Question 25

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

Question 26

Both demand and supply curves usually have positive slopes.

Question 27

An increase in consumer income will shift both the supply and demand curves.

Question 28

The more firms that are attracted to an industry, the greater will be the quantity of product supplied at any given price.

Question 29

Supply can shift due to changes in price.

Question 30

Demand shifts due to changes in price.

Question 31

Consumer income changes can shift market demand.

Question 32

As price increases, additional suppliers are willing to produce a commodity.

Question 33

A change in the price of a good has no effect on the supply schedule.

Question 34

As more firms are attracted to an industry, the supply curve can be expected to shift to the right.

Question 35

The position of a demand curve is unaffected by changes in the price of the good.

Question 36

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Question 37

A supply schedule can be plotted on a graph to yield a supply curve.

Question 38

Changes in the size of an industry may cause supply to shift.

Question 39

Demand curves can be affected by the prices of related goods.

Question 40

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Question 41

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Question 42

A shortage occurs when price is higher than the market equilibrium.

Question 43

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Question 44

At equilibrium, the market will clear, with no surpluses or shortages occurring.

Question 45

When price is above the equilibrium level, suppliers offer more than demanders wish to buy.

Question 46

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Question 47

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

Question 48

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Question 49

A surplus occurs when price is higher than the market equilibrium.

Question 50

Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

Question 51

If supply increases, the equilibrium price will rise and the equilibrium quantity will fall.

Question 52

Any factor that shifts the supply curve inward and to the left and does not affect the demand curve will raise the equilibrium price and reduce the equilibrium quantity.

Question 53

A price above equilibrium always yields a surplus.

Question 54

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

Question 55

The laws of supply and demand force prices to an equilibrium.

Question 56

Technological advances shift the supply curve rightward.

Question 57

At equilibrium, quantity demanded equals quantity supplied.

Question 58

When price is below the equilibrium level, there is a shortage of the commodity being sold.

Question 59

If demand increases, the equilibrium price and equilibrium quantity will both fall, everything else being equal.

Question 60

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Question 61

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Question 62

A price ceiling is only effective if it is above the market equilibrium.

Question 63

Price supports are a form of price ceiling for agricultural products that lowers prices for consumers and enhances market efficiency.

Question 64

Black-market prices are below equilibrium prices because sellers want to sell large quantities.

Question 65

Rent controls encourage investment in housing because they bring stability to the market.

Question 66

Price ceilings set a legal maximum price on a product or commodity.

Question 67

Governments can eliminate market surpluses through the imposition of price floors.

Question 68

Price floors lead to market surpluses.

Question 69

An economist would predict that if the government imposes price controls on medical care, the result will be an increase in the supply of affordable care in the United States.

Question 70

Since rent controls have been in effect in New York City, apartments have been more plentiful.

Question 71

Price supports increase the supply of affordable milk for U.S. families.

Question 72

Price floors are only effective below the market equilibrium.

Question 73

Price floors set a legal minimum price on a product or commodity.

Question 74

Price ceilings lead to market surpluses.

Question 75

Rent controls are most often designed to protect the investment made by apartment building owners.

Question 76

A black market develops only when quantity demanded exceeds quantity supplied.

Question 77

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Question 78

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

Question 79

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

Question 80

Rent controls are designed to protect consumers from high rents.