Supply and Demand Quiz
Questions: 16 · 10 minutes
1. Coffee and tea are substitutes. If the price of coffee rises, what will most likely happen in the tea market?
The demand for tea increases.
The supply of tea decreases.
The quantity demanded of tea decreases because its price has not changed.
The demand for tea decreases.
2. The price of oranges falls, and consumers buy more oranges. No other influence on demand has changed. How should this be represented?
As a movement along the demand curve to a greater quantity demanded
As a leftward shift of the supply curve
As a rightward shift of the demand curve
As a movement along the supply curve to a smaller quantity supplied
3. A new per-unit tax raises sellers' cost of bringing each unit to market. If other factors remain unchanged, how is the market supply curve affected?
It shifts right because the government receives revenue.
It shifts left because supplying each quantity is more costly.
It becomes the demand curve at the new price.
It does not shift; only demand changes.
4. A market price is above equilibrium, so the quantity supplied exceeds the quantity demanded. What is this condition called?
Scarcity
A demand shift
A surplus
A shortage
5. Printers and ink cartridges are complementary goods. If printer prices fall substantially, what is the most likely effect on ink cartridges?
Cartridge supply shifts left.
Cartridge demand shifts right.
Cartridge demand shifts left.
Cartridge quantity demanded falls along its existing demand curve.
6. Household incomes rise, and restaurant meals are a normal good. What is the most likely market effect?
The supply of restaurant meals shifts left.
The quantity demanded falls along the existing demand curve.
The demand for restaurant meals shifts right.
The demand for restaurant meals shifts left.
7. At the current price, buyers want 900 concert tickets, but sellers offer only 700. What does this market have?
A surplus of 200 tickets
An equilibrium quantity of 1,600 tickets
A shortage of 200 tickets
A demand decrease of 200 tickets
8. A bakery obtains flour at a lower cost while its other conditions remain unchanged. What will most likely happen to the bakery's supply of bread?
Quantity supplied falls because bread is cheaper to produce.
Supply shifts to the left.
Demand shifts to the right.
Supply shifts to the right.
9. According to the law of supply, how do sellers generally respond to a higher market price, all else equal?
They offer a smaller quantity for sale.
They offer a larger quantity for sale.
They increase consumer demand.
They shift the demand curve to the left.
10. The price of a product rises by 5%, and its quantity demanded falls by 20%. How should demand be described over this range?
Elastic
Unit elastic
Inelastic
Perfectly inelastic
11. A binding price floor is placed above the equilibrium price of a farm product. What outcome should be expected?
A shortage of the product
A surplus of the product
A leftward shift in demand caused directly by the price floor
An equilibrium price below the floor
12. A disease destroys part of the coffee crop, decreasing coffee supply while demand remains unchanged. What is the expected equilibrium outcome?
Both price and quantity fall.
Price falls, and quantity rises.
Both price and quantity rise.
Price rises, and quantity falls.
13. Demand for bicycles increases while bicycle supply remains unchanged. What happens to equilibrium price and quantity?
Both price and quantity rise.
Price rises, and quantity falls.
Both price and quantity fall.
Price falls, and quantity rises.
14. According to the law of demand, what usually happens when a good's price rises while other relevant factors remain unchanged?
The quantity supplied decreases.
Demand shifts to the right.
The quantity demanded decreases.
Supply shifts to the left.
15. Demand and supply for a product both increase. Which conclusion can be made without knowing the size of either shift?
Equilibrium price must rise.
Equilibrium price must fall.
Equilibrium quantity falls, while the effect on price is uncertain.
Equilibrium quantity rises, while the effect on price is uncertain.
16. A government sets a binding price ceiling below a market's equilibrium price. What is the most likely immediate result?
A rightward shift of the supply curve
A surplus because quantity supplied exceeds quantity demanded
A new equilibrium with no unmet demand
A shortage because quantity demanded exceeds quantity supplied