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- 1. Multiple Choice
__________ is the different quantities of goods that consumers are willing and able to purchase.
demand
utility
quantity demanded
consumer desire
- 2. Multiple Choice
What is a basic principle of the Law of Demand?
As price increases, demand also increases
As price increases, quantity demanded decreases
As price increases, quantity demanded decreases
As price increases, demand decreases
- 3. Multiple Choice
If price increases for a product, consumers will buy less of that product and more of another ________ product.
substitute
complement
normal
inferior
- 4. Multiple Choice
The Law of Diminishing Marginal Utility states that as you consume more of any good, the additional satisfaction you receive will
increase with each new unit consumed
decrease with each new unit consumed
stay the same with more units consumed
not make a difference on the margin
- 5. Multiple Choice
The demand curve is ________ sloping, showing the inverse relationship between price and quantity demanded.
horizontal
vertical
downward
upward
- 6. Multiple Choice
Market demand comes from
what individual consumers desire
all consumer desires in a market
productive efficiency
price decreases
- 7. Multiple Choice
When there is a change in price, there is also a change in __________ supplied or demanded.
shifters
quantity
utility
allocation
- 8. Multiple Choice
________ DOESN'T SHIFT THE CURVE!
income
technology
price
population
- 9. Multiple Choice
As income increases, demand increases -- but as income decreases, demand also decreases for this type of good:
substitute
complement
inferior
normal
- 10. Multiple Choice
For inferior goods, as income increases, demand decreases. As income decreases, demand will ________
increase
decrease
stay the same
- 11. Multiple Choice
When we talk about supply, we need to think like
consumers
producers
- 12. Multiple Choice
According to the Law of Supply, why is there a direct (positive) relationship between price and quantity supplied?
at lower prices, producers have incentives to produce more
at higher prices, consumers have incentives to buy less
at higher prices, producers have incentives to produce more
price stays the same no matter the quantity supplied
- 13. Multiple Choice
________ are a government payment that supports a business or market. This causes the supply of a good to increase.
taxes
equilibrium
subsidies
quantity supplied
- 14. Multiple Choice
Which of the following is NOT a shifter (determinant) for supply?
technology
# of sellers
future expectations
expectations of future profit
- 15. Multiple Choice
When Qd = Qs, we are at a(n)
shortage
surplus
disequilibrium
equilibrium
- 16. Multiple Choice
When there is a shortage, Qd is ________ than Qs.
less than
greater than
equal to
- 17. Multiple Choice
A ________ is when Qs is greater than Qd.
shortage
surplus
- 18. Multiple Choice
We all know price doesn't shift the curve. What does happen when there is a price change?
quantity (supply or demand) changes
the curve increases
the curve decreases
nothing
- 19. Multiple Choice
A SUPPLY curve always slopes
horizontal
up
down
vertical
- 20. Multiple Choice
What could be happening in this graph displaying the market for potato chips?
eating chips makes you cooler
there is a potato famine that wipes out 1/3 of all potato crops
the price of potatoes drops by 25%
the price of soda, a complement, rises drastically
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