Quiz 3 - Supply and Demand

Economists refer to the relationship that a higher price leads to a higher quantity supplied as the 1) law of supply. 2) market equilibrium. 3) price and supply model.

law of supply.

The downward slope of a demand curve illustrates the pattern that as ________ rises, ________ decreases. 1) price; quantity supplied 2) price; quantity demanded 3) quantity supplied; quantity demanded

price; quantity demanded

A demand curve shows the graphical relationship between price and 1) quantity produced. 2) costs. 3) quantity demanded.

quantity demanded.

A supply curve is a graphical illustration of the relationship between price and 1) quantity supplied. 2) demand. 3) quantity demanded.

quantity supplied.

Which of the following describes a market economy? 1) Resources and businesses are owned by the government. 2) Economic decision-making happens through markets. 3) There is no private property.

Economic decision-making happens through markets.

The market for hot dogs has been recently affected by a decrease in input prices. Following this change, how does the new equilibrium compare to the old? 1) Equilibrium price decreases and quantity increases. 2) Equilibrium price and quantity increase. 3) Equilibrium price and quantity decrease

Equilibrium price decreases and quantity increases.

If a decrease in the price of MP3 players decreases the demand for CD players, this means that 1) MP3 players and CD players are inferior goods. 2) MP3 players and CD players are substitutes. 3) MP3 players and CD players are normal goods.

MP3 players and CD players are substitutes.

If demand increases and supply remains constant, what happens to the market equilibrium?​ 1) Quantity rises and price falls. 2) Quantity and price both fall. 3) Quantity and price both rise.

Quantity and price both rise.

The price of printers at the big box technology stores increases as a new type of print technology is rolled out to consumers. Which of the following scenarios for a complementary printer good would likely take place? 1) The demand for printer ink decreases as less people are buying printers. 2) The demand for printer ink rises as people stock up with their new printers. 3) The demand for printer paper rises as people stock up.

The demand for printer ink decreases as less people are buying printers.

Which of the following statements describe a competitive market? 1) Government does not intervene in any way. 2) The number of sellers is limited to a select few. 3) There is a large number of buyers and sellers.

There is a large number of buyers and sellers.

There has been a recent medical study released which confirms that vitamin C can kill off viruses and in fact stops sepsis in hospital patients so they can recover faster. With this new information what do you think will happen to the Vitamin C supplement market? 1) There will be a decrease in the quantity demanded. 2) There will be an increase only in the quantity demanded. 3) There will be a shift if the demand curve as demand increases.

There will be a shift if the demand curve as demand increases.

Last year the Rocky Mountains received many snow storms and five months of snow which created a large demand in show shovels. This year however, there have been three snow storms and only a few weeks of winter snow. If you were to draw a graph of the current market for snow shovels, how would the new equilibrium price and quantity demanded compare to last year's market? 1) With supply of snow shovels being constant, the equilibrium price and quantity increase for snow shovels compared to last year. 2) With supply of snow shovels being constant, equilibrium price decreases and quantity increases for snow shovels compared to last year. 3) With supply of snow shovels being constant, equilibrium price and quantity decrease for snow shovels compared to last year.

With supply of snow shovels being constant, equilibrium price and quantity decrease for snow shovels compared to last year.

According to the law of supply, assuming other factors are held constant 1) as the price of bread increases, the quantity of bread supplied will decrease. 2) as the supply for bread increases, the price of bread will also increase. 3) as the price of bread increases, the quantity of bread supplied will increase.

as the price of bread increases, the quantity of bread supplied will increase.

The law of demand states that as the price of a good increases, 1) more of it is produced. 2) suppliers wish to sell less of it. 3) buyers desire to purchase less of it.

buyers desire to purchase less of it.

When the price of a particular good increases 1) demand for substitute goods falls. 2) demand for complementary goods falls. 3) demand for normal goods rises.

demand for complementary goods falls.

Hannah has a small business making clothing alterations. Which of the following products would dramatically affect her profit margins if the price were to decrease for that product? 1) dresses 2) thread 3) sewing machines

dresses

The ________ is where quantity demanded and quantity supplied are equal at a certain price. 1) surplus 2) supply schedule 3) equilibrium

equilibrium

When the actual price in some market is above the equilibrium price, the resulting market condition is known as 1) excess supply. 2) excess demand. 3) price ceiling.

excess supply.

From an initial equilibrium, suppose there's a decrease in supply. Once the market reaches its new equilibrium, there will be 1) more transactions, and they will take place at a lower price. 2) fewer transactions, and they will take place at a higher price. 3) fewer transactions, and they will take place at a lower price.

fewer transactions, and they will take place at a higher price.

Complete the following sentence: If people think that the price of electronics will increase in the near future, that belief may cause a(n) 1) increase in the supply of electronics today. 2) increase in the demand for electronics today. 3) decrease in the price of electronics today.

increase in the demand for electronics today.

If a country has an economy where people can buy and sell freely, but the government sets some price restrictions and regulations then it likely has a________ economy. 1) mixed market 2) free market 3) command

mixed market

A change in technology that reduces the costs of production will 1) shift the supply curve to the right. 2) increase consumer demand. 3) decrease consumer demand.

shift the supply curve to the right.

In a market with an upward sloping supply curve and a downward sloping demand curve, when there is an excess supply, 1) the actual price must be higher than the equilibrium price. 2) the quantity demanded is higher than the equilibrium quantity. 3) the actual price must be lower than the equilibrium price.

the actual price must be higher than the equilibrium price.

A severe freeze has damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of 1) the demand curve. 2) the supply curve. 3) both the supply and demand curves.

the supply curve.