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- 1. Multiple Choice
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.
- 2. Multiple Choice
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.
- 3. Multiple Choice
What does the Latin phrase Ceteris paribus literally 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."
- 4. Multiple Choice
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.
- 5. Multiple ChoiceWhich situation is most likely to lead to the lowest prices?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.
- 6. Multiple Choice
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
- 7. Multiple ChoiceLegal maximum that can be charged for a good.price ceilingexcess demandequilibriumdisequilibrium
- 8. Multiple Choice
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.
- 9. Multiple Choice
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.
- 10. Multiple Choice
Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?
$7, 20.
$7, 60.
$5, 40.
$3, 60.
- 11. Multiple Choice
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.
- 12. Multiple ChoiceWhen quantity supplied is not equal to quantity demandedprice ceilingexcess demandequilibriumdisequilibrium
- 13. Multiple ChoiceWhen the government sets a price floor on earned income, it is called which of the following?market equilibrium ratebase-level wageminimum wageemployment guarantee
- 14. Multiple Choice
Every year on Black Friday (the day after Thanksgiving) businesses have extremely low prices on certain items. Why would a business do this?
To create high supply
To create high demand
To create jobs
To create chaos
- 15. Multiple ChoiceWhen quantity supplied exceeds quantity demanded at a certain price.shortagefadsearch costssurplus
- 16. Multiple ChoiceEquilibrium in a market means which of the following?the point at which quantity supplied and quantity demanded are the samethe point at which unsold goods begin to pile upthe point at which suppliers begin to reduce prices
- 17. Multiple Choice
Levis will pay its workers $1.50 more per hour. What happens in the market? - Market: jeans
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 18. Multiple Choice
Price of ground beef skyrockets. What happens in the market? - Market: Hamburger buns
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 19. Multiple Choice
High levels of mercury found in canned tuna. What happens in the market? - Market: canned tuna
Demand Increase
Demand Decrease
Supply increase
Supply Decrease
- 20. Multiple Choice
US announces a tax on car tires to pay for national highway bridges. What happens in the market? - Market: car tires
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 21. Multiple Choice
New methane process turns garbage into home heating fuel. What happens in the market? - Market: home heating fuel
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 22. Multiple Choice
Price of shaving cream goes up. What happens in the market? - Market: manual razors
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 23. Multiple Choice
Price of turkey rises. What happens in the market? - Market: chicken
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
- 24. Multiple Choice
Due to Covid 19, US citizens are not allowed to travel to Italy. Market for airline tickets from Chicago to Rome.
Demand Increase
Demand Decrease
Demand Unchanged
Supply Increase
- 25. Multiple Choice
Nike announces they will have a back-to-school special in August and shoes will be 20% off in August. What happens in the market? - Market: Nike shoes in July
Demand Increase
Demand Decrease
Demand Unchanged
Supply Decrease
- 26. Multiple Choice
Due Covid 19, US automakers are forced to make hospital ventilators. What happens in the market? - Market for cars.
Demand Increase
Demand Decrease
Supply Increase
Supply Decrease
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