Deck 4: Supply and Demand: An Initial Look

Question 1

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

Answer 1

True

Question 2

The laws of supply and demand did not apply to Asian currencies.

Answer 2

False

Question 3

Demand and quantity demanded are the same thing.

Answer 3

False

Question 4

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

Question 5

An increase in price will decrease demand.

Question 6

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

Question 7

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

Question 8

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

Question 9

Changes in consumer preference toward small,imported automobiles have shifted their demand curves downward and to the left.

Question 10

Very few societies have used price controls.

Question 11

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

Question 12

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 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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

Question 22

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

Question 23

When people suddenly want to buy something,supply increases.

Question 24

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

Question 25

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

Question 26

An increase in price will increase supply.

Question 27

Consumer income changes can shift market demand.

Question 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

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

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

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

Question 36

Supply can shift due to changes in price.

Question 37

Both demand and supply curves usually have positive slopes.

Question 38

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

Question 39

Demand shifts due to changes in price.

Question 40

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

Question 41

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

Question 42

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 43

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

Question 44

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

Question 45

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 46

A price above equilibrium always yields a surplus.

Question 47

Technological advances shift the supply curve rightward.

Question 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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

Question 57

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

Question 58

At equilibrium,quantity demanded equals quantity supplied.

Question 59

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

Question 60

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

Question 61

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

Question 62

If the government puts price controls on medical care,this will increase the supply of affordable care in the United States.

Question 63

Price floors are only effective below the market equilibrium.

Question 64

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

Question 65

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

Question 66

Sugar price supports primarily benefit consumers.

Question 67

A minimum wage law may cause unemployment among low-skill workers.

Question 68

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

Question 69

Price ceilings lead to market surpluses.

Question 70

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

Question 71

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

Question 72

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

Question 73

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

Question 74

Price floors lead to market surpluses.

Question 75

Regulations are sometimes used to "correct" the failures of a market mechanism.

Question 76

Rent controls are designed to protect consumers from high rents.

Question 77

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

Question 78

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

Question 79

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

Question 80

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