20 questions
Thousands of people leave a small town due to a factory closing down. Sales at the local grocery store are reduced. What causes this change?
Prices or availability of substitutes
Prices or availability of complementary goods
Change in the weather or season
Change in the number of buyers
New technology advances the rate at which furniture can be assembled. Why does this change the supply?
There is a change in cost of production.
The number of producers changes.
The expectations of consumers changes.
The output rate declines.
Which of the following best refers to the market equilibrium price?
Surpluses depress the number of goods supplied.
Shortages and surpluses will have no effect on the market.
The government will not intervene in the market.
The quantity demanded is the same as the quantity supplied.
Mr Kong goes to the ticket booth to buy tickets for a football game. Mr. Kong is told that the game is sold out and no tickets are available. Which best explains why there are no tickets available?
The arena forgot to print enough tickets.
The supply of tickets was greater than the demand.
The arena charged too much money for each ticket.
The demand for tickets was greater than the supply.
Which statement expresses a central idea of how the laws of supply and demand work?
The government sets the prices for goods and services.
Prices are determined by the interaction of producers and consumers.
Consumers alone determine the prices for goods and services.
Technology dictates the prices charged for goods and services.
Which of the following would NOT be a determinant of demand?
The price of related goods
Income
Tastes
The prices of the inputs used to produce the good
If the price of a substitute to good X increases, then
The demand for good X will increase.
The market price of good X will decrease.
The demand for good X will decrease.
The demand for good X will not change.
Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?
It would decrease.
It would increase.
It would be unaffected.
There is insufficient information given to answer the question.
A higher price for batteries would tend to
increase the demand for flashlights.
decrease the demand for electricity.
increase the demand for electricity.
increase the demand for batteries.
What will happen in the rice market if buyers are expecting higher prices in the near future?
The demand for rice will increase.
The demand for rice will decrease.
The demand for rice will be unaffected.
The supply of rice will increase.
Refer to Graph 4-1. The movement from point A to point B on the graph shows
a decrease in demand.
an increase in demand.
an increase in quantity demanded.
a decrease in quantity demanded.
What does the Latin phrase Ceteris paribus mean?
"other things being equal."
"after this therefore because of this."
"to respond slowly to a change in price."
"There's no such thing as a free lunch."
What best refers to the situation when the price of a good or service changes?
there is a movement along a stable demand curve.
demand shifts in the opposite direction.
demand shifts in the same direction.
supply shifts in the opposite direction.
Other things equal, when the price of a good rises, the quantity supplied of the good also rises. What best refers to this situation?
The law of increasing costs.
The law of diminishing returns.
The law of supply.
The law of demand
Refer to Graph 4-4. On the graph, what could most likely cause the movement from S to S1?
A decrease in the price of the good.
An increase in income.
An improvement in technology.
An increase in input prices.
Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?
$7, 20.
$7, 60.
$5, 40.
$3, 60.
Refer to Graph 4-5. According to the graph, What occurs at a price of $7?
there would be a shortage of 40 units.
there would be a surplus of 40 units.
there would be a surplus of 20 units.
the market would be in equilibrium.
Refer to Table 4-2. In the table shown, what would be the result if the price were $8?
a surplus of 30 units would exist and price would tend to fall.
a surplus of 60 units would exist and price would tend to rise.
a surplus of 60 units would exist and price would tend to fall.
a shortage of 30 units would exist and price would tend to rise.