2.5 & 2.6 Demand, Supply, & Equilibrium
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20 QuestionsShow answers
  • Question 1
    60 seconds
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    Q.

    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?

    answer choices

    Prices or availability of substitutes

    Prices or availability of complementary goods

    Change in the weather or season

    Change in the number of buyers

  • Question 2
    60 seconds
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    Q.

    New technology advances the rate at which furniture can be assembled. Why does this change the supply?

    answer choices

    There is a change in cost of production.

    The number of producers changes.

    The expectations of consumers changes.

    The output rate declines.

  • Question 3
    60 seconds
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    Q.

    Which of the following best refers to the market equilibrium price?

    answer choices

    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.

  • Question 4
    60 seconds
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    Q.

    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?

    answer choices

    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.

  • Question 5
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    Q.

    Which statement expresses a central idea of how the laws of supply and demand work?

    answer choices

    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.

  • Question 6
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    Q. Which situation is most likely to lead to the lowest prices?
    answer choices
    There is only one producer making the good.
    Businesses secretly agree to share their profits.
    Competition between businesses is prohibited.
    Several producers compete to sell goods to the public.
  • Question 7
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    Q. When companies compete in a market economy, what is usually the result?
    answer choices
    Consumers are able to buy goods for the best available price.
    People pay much higher prices for goods.
    There are frequent shortages of goods on the market.
    Producers refuse to sell some of their products.
  • Question 8
    60 seconds
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    Q.

    Which of the following would NOT be a determinant of demand?

    answer choices

    The price of related goods

    Income

    Tastes

    The prices of the inputs used to produce the good

  • Question 9
    60 seconds
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    Q.

    If the price of a substitute to good X increases, then

    answer choices

    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.

  • Question 10
    60 seconds
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    Q.

    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?

    answer choices

    It would decrease.

    It would increase.

    It would be unaffected.

    There is insufficient information given to answer the question.

  • Question 11
    60 seconds
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    Q.

    A higher price for batteries would tend to

    answer choices

    increase the demand for flashlights.

    decrease the demand for electricity.

    increase the demand for electricity.

    increase the demand for batteries.

  • Question 12
    60 seconds
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    Q.

    What will happen in the rice market if buyers are expecting higher prices in the near future?

    answer choices

    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.

  • Question 13
    60 seconds
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    Q.

    Refer to Graph 4-1. The movement from point A to point B on the graph shows

    answer choices

    a decrease in demand.

    an increase in demand.

    an increase in quantity demanded.

    a decrease in quantity demanded.

  • Question 14
    60 seconds
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    Q.

    What does the Latin phrase Ceteris paribus mean?

    answer choices

    "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."

  • Question 15
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    Q.

    What best refers to the situation when the price of a good or service changes?

    answer choices

    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.

  • Question 16
    60 seconds
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    Q.

    Other things equal, when the price of a good rises, the quantity supplied of the good also rises. What best refers to this situation?

    answer choices

    The law of increasing costs.

    The law of diminishing returns.

    The law of supply.

    The law of demand

  • Question 17
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    Q.

    Refer to Graph 4-4. On the graph, what could most likely cause the movement from S to S1?

    answer choices

    A decrease in the price of the good.

    An increase in income.

    An improvement in technology.

    An increase in input prices.

  • Question 18
    60 seconds
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    Q.

    Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?

    answer choices

    $7, 20.

    $7, 60.

    $5, 40.

    $3, 60.

  • Question 19
    60 seconds
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    Q.

    Refer to Graph 4-5. According to the graph, What occurs at a price of $7?

    answer choices

    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.

  • Question 20
    60 seconds
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    Q.

    Refer to Table 4-2. In the table shown, what would be the result if the price were $8?

    answer choices

    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.

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