Deck 3: Demand and Supply

Question 1

Demand is best defined as the:

A) amount of a commodity that buyers would be willing and able to purchase at a specific price.
B) price that buyers would be willing and able to pay for a specific quantity of a good.
C) relationship between the price of a good and the quantity people are able to purchase, all other things unchanged.
D) relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged.

Answer 1

relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged.

Question 2

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 60 cents, the quantity demanded by George is ________ bags per month.

A) 10
B) 15
C) 20
D) 25

Answer 2

25

Question 3

A negative relationship between the quantity demanded and price is called the law of ______.

A) demand
B) diminishing marginal returns
C) market clearing
D) supply

Answer 3

demand

Question 4

Demand is defined as:

A) an amount that is purchased at a specific price, given supply.
B) a schedule that establishes the price of a good.
C) a schedule that shows how much will be purchased at various prices during a particular period, all other things unchanged.
D) the amount that will be bought at a specific price.

Question 5

A decrease in the price of a good will, all other things unchanged, result in:

A) an increase in demand.
B) an increase in supply.
C) an increase in the quantity demanded.
D) more being supplied.

Question 6

The demand curve for on-demand videos has shifted to the right.What could have caused it?

A) A fall in the price of on-demand videos.
B) An increase in the price of on-demand videos.
C) An increase in the supply of on-demand videos.
D) An increase in the income of buyers.

Question 7

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:

A) supply.
B) demand.
C) scarcity.
D) increasing opportunity costs.

Question 8

If the price of a commodity increases, all other things unchanged, you would expect the:

A) demand to decrease.
B) quantity demanded to increase.
C) quantity demanded to decrease.
D) demand curve to shift to the left.

Question 9

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ________ cents.

A) 90
B) 80
C) 70
D) 60

Question 10

The law of demand is illustrated by a demand curve that is:

A) horizontal.
B) downward-sloping.
C) vertical.
D) upward-sloping.

Question 11

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is 80 cents, the total market demand is ________ bags per month.

A) 70
B) 80
C) 105
D) 280

Question 12

The relationship between the price of a good and the quantity people are willing and able to purchase is:

A) supply.
B) demand.
C) equilibrium.
D) disequilibrium.

Question 13

The law of demand is illustrated when:

A) an increase in tuition encourages more students to enroll in college because the quality of education has risen.
B) an increase in the purchases of personal computers results from lower prices.
C) higher oil prices cause oil companies to drill for new sources of oil.
D) higher fees for the use of public golf courses force golfers to purchase fewer golf balls.

Question 14

The law of demand implies that:

A) consumers are not responsive to price changes.
B) consumers will, all other things unchanged, buy more at lower prices.
C) sellers will, all other things unchanged, offer more on the market at higher prices.
D) sellers will, all other things unchanged, offer less on the market at lower prices.

Question 15

Which of the following most correctly states the law of demand?

A) As the price falls all other things unchanged, demand will go up.
B) As the price goes up, all other things unchanged, demand will go down.
C) As the price falls, all other things unchanged, the quantity demanded will go down.
D) As the price falls, all other things unchanged, the quantity demanded will increase.

Question 16

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts increases from 40 cents to 50 cents, Dan will reduce his quantity demanded from 160 bags to 140 bags due to:

A) the law of demand.
B) the law of supply.
C) a decline in his income.
D) a change in his tastes and preferences.

Question 17

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is 50 cents, the total market demand is ________ bags per month.

A) 80
B) 105
C) 210
D) 280

Question 18

Use the following to answer question(s): The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)

(Exhibit: The Demand for Chocolate-Covered Peanuts) If George is only able to purchase 30 bags of chocolate-covered peanuts, the maximum price he is willing and able to pay for each bag is ________ cents.

A) 80
B) 70
C) 60
D) 50

Question 19

When economists study the behavior of buyers, they are studying:

A) supply.
B) the role of government.
C) demand.
D) psychology.

Question 20

A decrease in the price of eggs, all other things unchanged, will result in a(n):

A) increase in the demand for eggs.
B) increase in the supply of eggs.
C) greater quantity of eggs supplied.
D) greater quantity of eggs demanded.

Question 21

Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:

A) an increase in the demand for potatoes.
B) an increase in the quantity of potatoes demanded.
C) a decrease in the demand for potatoes.
D) no change in the demand for potatoes.

Question 22

The slope and location of the demand curve depend on:

A) the number of buyers.
B) production costs.
C) the number of producers.
D) all of the above.

Question 23

Two goods are substitutes if:

A) an increase in the price of one leads to a shift to the left in the demand curve for the other.
B) an increase in the price of one leads to an increase in demand for the other.
C) an increase in the price of one will increase the supply of the other.
D) a fall in the price of one leads to a reduction in supply for the other.

Question 24

Use the following to answer question(s): The Demand for Music Downloads

(Exhibit: The Demand for music downloads) A decrease in the price of iPods and other similar devices would result in a change illustrated by:

A) the move from f to g in Figure (a).
B) the move from h to i in Figure (b).
C) the move from j to k in Figure (c).
D) the move from l to m in Figure (d).

Question 25

Given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be:

A) an increase in the demand for beef.
B) a decrease in the demand for beef.
C) a decrease in the quantity of beef demanded.
D) no change in the demand for beef.

Question 26

A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?

A) income
B) prices
C) consumer preferences
D) prices of other goods

Question 27

Which of the following would not change the demand for automobiles?

A) a change in the price of gasoline
B) a change in the cost of steel
C) a change in the price of motorcycles
D) a change in tastes

Question 28

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:

A) shifts to the right.
B) shifts to the left.
C) stays the same.
D) shifts to the right and then moves back.

Question 29

Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?

A) a fall in the price of milk
B) an increase in income
C) an expected increase in milk prices
D) a decrease in the price of cookies (a complement)

Question 30

Which of the following would result in a movement along the demand curve?

A) a change in preferences
B) an increase in the number of buyers
C) an increase in the number of suppliers
D) a decrease in income

Question 31

Use the following to answer question(s): The Demand for Music Downloads

(Exhibit: The Demand for music downloads) A decrease in the price of CDs (a substitute) would result in a change illustrated by:

A) the move from f to g in Figure (a).
B) the move from h to i in Figure (b).
C) the move from j to k in Figure (c).
D) the move from l to m in Figure (d).

Question 32

Plastic and steel are substitutes in the production of automobiles.If steel prices go up, all other things unchanged:

A) the equilibrium price of plastic will fall.
B) the demand curve for plastic will shift to the left.
C) the demand curve for plastic will shift to the right.
D) the equilibrium quantity of plastic demanded will increase and the equilibrium price will fall.

Question 33

Every day for the past two years you've had ham and cheese on a whole wheat bagel for lunch at Bungalow Bob's Bagel Boutique.However, the price of whole wheat bagels has risen by 10 cents so today you decide to have ham and cheese on a rye bagel.In this case, whole wheat and rye bagels are best considered:

A) superior goods.
B) normal goods.
C) substitute goods.
D) complementary goods.

Question 34

An increase in the price of football tickets will cause the ________ for (of) basketball tickets (a substitute) to ________ .

A) demand; increase
B) demand; decrease
C) supply; decrease
D) supply; increase

Question 35

For most consumers, blu-ray players and blu-ray discs are likely to be:

A) substitute goods.
B) complementary goods.
C) inferior goods.
D) independent goods.

Question 36

Demand and supply curves are drawn assuming ceteris paribus.This means that:

A) economists ignore all assumptions.
B) economists don't watch for the fallacy of false cause.
C) changes will be proportional.
D) all other things besides price and quantity are assumed unchanged.

Question 37

An announcement that smoking will harm your ability to think clearly will most likely result in:

A) an increase in the quantity of cigarettes demanded.
B) a decrease in the demand for cigarettes.
C) no change in smoking habits.
D) an increase in the equilibrium price of cigarettes.

Question 38

Use the following to answer question(s): The Demand for Music Downloads

(Exhibit: The Demand for music downloads) A decrease in the fee charged for music downloads would result in a change illustrated by:

A) the move from f to g in Figure (a).
B) the move from h to i in Figure (b).
C) the move from j to k in Figure (c).
D) the move from l to m in Figure (d).

Question 39

Which statement best illustrates complementary goods?

A) The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls.
B) The price of Apple Macintosh computers declines so your economics instructor sells his or her IBM personal computer and buys a Macintosh.
C) After receiving a promotion and a hefty year-end bonus from the college, your economics instructor decides to stop buying denim jeans and switches to clothing befitting his or her loftier position on the faculty.
D) Fearing that the price of pipe tobacco will rise next year, your economics professor goes to his local tobacconist and purchases an ample supply to last for several years.

Question 40

The primary difference between a change in demand and a change in the quantity demanded is:

A) a change in demand is a movement along the demand curve, and a change in quantity demanded is a shift in the demand curve.
B) a change in quantity demanded is a movement along the demand curve, and a change in demand is a shift in the demand curve.
C) both a change in quantity demanded and a change in demand are shifts in the demand curve, only in different directions.
D) both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.

Question 41

An increase in the demand for medical services caused by an increase in the number of people over 65 is most likely attributable to which demand shifter?

A) income
B) consumer preferences
C) prices of other goods
D) demographic characteristics

Question 42

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

A) supply.
B) demand.
C) equilibrium.
D) disequilibrium.

Question 43

A decrease in supply means:

A) a shift to the left of the entire supply curve.
B) moving downward (to the left) along the supply curve with lower prices.
C) less will be demanded at every price.
D) more will be supplied at every price.

Question 44

How a supply curve is sloped and located is affected by:

A) consumer preferences.
B) resource prices.
C) the number of consumers.
D) all of the above.

Question 45

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

A) supply shifter
B) demand shifter
C) false prophet
D) spoiler

Question 46

For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes.Such goods are known as:

A) inferior goods.
B) direct goods.
C) normal goods.
D) luxury goods.

Question 47

When economists study the behavior of sellers, they are studying:

A) supply.
B) the role of government.
C) demand.
D) accounting.

Question 48

Economists know that a particular good can be classified as an inferior good if a(n) ________ in buyers' income causes a(n) ________ .

A) increase; increase in demand
B) increase; increase in quantity demanded
C) increase; decrease in demand
D) decrease; decrease in demand

Question 49

A decrease in the price of milk (and ingredient of ice cream) will result in a(n):

A) shift of the supply curve of ice cream to the left.
B) shift of the supply curve of ice cream to the right.
C) lower price of ice cream, and thus an increase in the demand for ice cream.
D) increase in the demand for ice cream and a decrease in the supply of milk.

Question 50

Supply is best defined as the:

A) relationship between the quantity of a good or service buyers are able to purchase, all other things unchanged.
B) relationship between the quantity of a good or service buyers are willing to purchase, all other things unchanged.
C) relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged.
D) quantity of a good or service sellers are willing to offer for sale at a specific price, all other things unchanged.

Question 51

A supply curve that is upward sloping means that:

A) demand is being ignored.
B) consumers will buy less at lower prices.
C) suppliers will want to sell more at higher prices.
D) suppliers will want to sell less at higher prices.

Question 52

In the Case in Point on campus parking, the implication was that existing prices for parking spaces on university campuses are generally:

A) too high.
B) too low.
C) about right.
D) unconscionable.

Question 53

Factor prices, returns from alternative activities, technology, number of firms, producer expectations, and natural events are often termed:

A) demand determinants.
B) demand quantities.
C) supply prices.
D) supply shifters.

Question 54

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:

A) price curve.
B) supply curve.
C) quantity function.
D) production possibilities curve.

Question 55

After graduation from college you will receive a substantial increase in your income from a new job.If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):

A) normal good.
B) substitute good.
C) complementary good.
D) inferior good.

Question 56

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?

A) income
B) consumer expectations
C) consumer preferences
D) prices of other goods

Question 57

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:

A) demand shifters.
B) supply prices.
C) market realities.
D) supply shifters.

Question 58

Assuming that pizza is a normal good, if students' income at your college increases substantially, there would be:

A) a reduction in the demand for pizza.
B) an increase in the quantity of pizza demanded.
C) no change in the demand for pizza.
D) an increase in the demand for pizza.

Question 59

Which of the following would shift the demand curve for new textbooks to the right?

A) A decrease in the price of paper.
B) A fall in the price of used textbooks.
C) An increase in college enrollments.
D) A fall in the price of new textbooks.

Question 60

An increase in supply of a good is caused by:

A) resource prices rising.
B) a fall in the price of the good.
C) an increase in the number of sellers.
D) expectations of future price increases.

Question 61

Use the following to answer question(s): The Supply of Music Downloads

(Exhibit: The Supply of Music Downloads) A decrease in the fee charged for music downloads would result in a change illustrated by the move from:

A) n to o in Figure (a).
B) p to q in Figure (b).
C) s to t in Figure (c).
D) u to v in Figure (d).

Question 62

A decrease in supply is caused by:

A) a decrease in resource prices.
B) an increase in the number of sellers in the market.
C) suppliers' expectations of higher prices in the future.
D) an advancement in the technology for producing the good.

Question 63

If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:

A) a decrease in the supply of pizza.
B) an increase in the supply of pizza.
C) an increase in the quantity of pizza supplied.
D) no change in the supply of pizza.

Question 64

A shift to the left of a supply curve is caused by:

A) an increase in the number of sellers.
B) a technological improvement.
C) an increase in the returns from other supply possibilities.
D) an increase in the number of buyers.

Question 65

An example of a supply shifter is:

A) demographic characteristics.
B) technology.
C) income.
D) consumer expectations.

Question 66

A decrease in supply is caused by:

A) a decrease in resource prices.
B) a decrease in the number of sellers in the market.
C) suppliers' expectations of lower prices in the future.
D) an advancement in the technology for producing the good.

Question 67

An increase in supply is caused by:

A) an increase in resource prices.
B) a decrease in the number of sellers in the market.
C) suppliers' expectations of higher prices in the future.
D) an advancement in the technology for producing the good.

Question 68

In the Case in Point on "The Monks of St.Benedict's," the Monks got out of the egg business largely because:

A) there was a large increase in the supply of eggs from other producers.
B) of the increase in the price of chicken feed.
C) the Pope forbade them from working on Sunday.
D) a huge increase in the demand for eggs caused the price of eggs to increase, and their operation was too small to meet the demand.

Question 69

A substantial increase in the price of oranges (a normal good) is likely to result from:

A) an increase in the amount of imported oranges.
B) a prolonged freeze in Florida.
C) a decline in buyers' incomes.
D) a decrease in the public's demand for orange juice.

Question 70

Which would not cause the supply curve to shift?

A) a change in technology
B) a change in factor costs
C) a change in the price of the good
D) a change in the prices of related goods

Question 71

Use the following to answer question(s): The Supply of Music Downloads

(Exhibit: The Supply of Music downloads) A decrease in the number of websites supplying music downloads would result in a change illustrated by:

A) the move from n to o in Figure (a).
B) the move from p to q in Figure (b).
C) the move from s to t in Figure (c).
D) the move from u to v in Figure (d).

Question 72

Which of the following will result in an increased price of milk?

A) A shift to the right of the supply curve for milk.
B) A shift to the right of the demand curve for milk.
C) An increase in the number of milk suppliers.
D) A decrease in the number of milk buyers.

Question 73

Use the following to answer question(s): The Supply of Music Downloads

(Exhibit: The Supply of Music Downloads) A decrease in the price of music licenses sold by music companies to online sites would result in a change illustrated by:

A) the move from n to o in Figure (a).
B) the move from p to q in Figure (b).
C) the move from s to t in Figure (c).
D) the move from u to v in Figure (d).

Question 74

In the 1990s, the Monks of St.Benedict's the Monks determined that their ________ were ________ in the egg and cookie business, so they ________ .

A) opportunity costs; too low; switched to providing private retreats
B) opportunity costs; too high; switched to providing private retreats
C) profits; too high; went out of business
D) operating costs; too low; opened a new business

Question 75

An increase in supply is caused by:

A) an increase in resource prices.
B) suppliers' expectations of higher prices in the future.
C) an increase in the price of a good using the same resources.
D) a decrease in the price of a good using the same resources.

Question 76

All other things unchanged, a tax on a product that leads to an increase in the cost of production would:

A) lead to an increase in supply.
B) lead to a decrease in demand.
C) result in an increased price.
D) lead to a decrease in supply.

Question 77

A shift of a demand curve to the right, all other things unchanged, will:

A) increase equilibrium price and quantity.
B) decrease equilibrium price and quantity.
C) decrease quantity and increase price.
D) increase quantity and decrease price.

Question 78

The primary difference between a change in supply and a change in the quantity supplied is:

A) a change in quantity supplied is a shift in the supply curve, and a change in supply is a movement along the supply curve.
B) both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions.
C) a change in quantity supplied is a movement along the supply curve, and a change in supply is a shift of the supply curve.
D) a change in supply is a movement to the left along the supply curve and a change in quantity supplied is a movement to the right along the supply curve.

Question 79

If the price of a commodity increases as the result of increased demand, you would expect the:

A) supply to increase.
B) quantity supplied to increase.
C) quantity supplied to decrease.
D) supply curve to shift to the right.

Question 80

A decrease in supply is caused by:

A) an increase in returns from other alternative activities.
B) suppliers' expectations of lower prices in the future.
C) an advancement in the technology for producing the good.
D) a decrease in the price of a good using the same resources.