SUPPLY & DEMAND

1. If the price of a good increases, a. consumers will demand a lower quantity b. supply will increase c. supply will decrease d. demand will decrease e. producers will supply a lower quantity

2. The relationship between price and quantity demanded is graphically illustrated by the a. demand curve b. demand table c. demand schedule d. demand graph e. demand chart

3. A table showing the relationship between the price of a good and quantity supplied is called a a. supply table b. supply curve c. supply graph d. supply chart e. supply schedule

4. The law of supply states that the relationship between price and quantity supplied is a. categorical b. direct c. converse d. indirect e. inverse

5. The law of demand states that the relationship between price and quantity demanded is a. categorical b. inverse c. indirect d. converse e. direct

6. An increase in demand is represented by a(n) a. movement down the demand curve b. movement up the demand curve c. increase in the slope of the demand curve d. rightward shift of the demand curve e. leftward shift of the demand curve

7. A decrease in the price of inputs will cause a. movement along the supply curve b. the supply curve to shift right c. the demand curve to shift left d. the supply curve to shift left e. the demand curve to shift right

8. An increase in the price of a complement good will cause a. movement along the demand curve b. the demand curve to shift left c. the supply curve to shift right d. the supply curve to shift left e. the demand curve to shift right

9. An increase in the price of a substitute good will cause a. the supply curve to shift left b. movement along the demand curve c. the demand curve to shift left d. the supply curve to shift right e. the demand curve to shift right

10. An increase in the number of buyers will cause a. the supply curve to shift left b. the demand curve to shift right c. the supply curve to shift right d. movement along the demand curve e. the demand curve to shift left

11. An increase in the rate of interest paid to capital causes a. the supply curve to shift left b. the supply curve to shift right c. the demand curve to shift right d. movement along the supply curve e. the demand curve to shift left

12. An increase in price will cause a. the demand curve to shift right b. the supply curve to shift right c. the demand curve to shift left d. the supply curve to shift left e. movement along the supply curve

13. An increase in supply will a. decrease price and quantity b. have no effect on market equilibrium c. increase price and quantity d. decrease price and increase quantity e. increase price and decrease quantity

14. A decrease in demand will a. increase price and quantity b. decrease price and quantity c. decrease price and increase quantity d. have no effect on market equilibrium e. increase price and decrease quantity

15. A war with Iran shuts down oil shipments from the Middle East. In the market for oil, a. price decreases and quantity increases b. the equilibrium is unaffected c. price and quantity increase d. price increases and quantity decreases e. price and quantity decrease

16. In the market for tangerines, an increase in the price of oranges will a. increase price and decrease quantity b. have no effect on market equilibrium c. decrease price and quantity d. increase price and quantity e. decrease price and increase quantity

17. Researchers develop a new breed of cow that greatly increases milk production. In the market for ice cream, a. price decreases and quantity increases b. price increases and quantity decreases c. price and quantity decrease d. price and quantity increase e. the equilibrium is unaffected

18. In the market for tennis balls, a decrease in the price of tennis rackets will a. have no effect on market equilibrium b. increase price and quantity c. decrease price and increase quantity d. decrease price and quantity e. increase price and decrease quantity

19. A new study links consumption of apples to decreased risk of heart disease. In the market for apples, a. the equilibrium is unaffected b. price and quantity increase c. price and quantity decrease d. price increases and quantity decreases e. price decreases and quantity increases

20. In the market for chocolate bars, a decrease in the price of cacao beans will a. decrease price and quantity b. increase price and decrease quantity c. decrease price and increase quantity d. have no effect on market equilibrium e. increase price and quantity