Supply and Demand
___1. Which of the following will not causethe demand curve for good “A” to shift?
a. a change in the price of “A”.b. a change in the price of B, a complement
c. an increase in consumer income d. a change in the price of C, a substitute.
___2. A surplusof a commoditycan be expected whenever:
- prevailing price of the good is below the equilibrium price[QD>QS].
- prevailing price of the good is above the equilibrium price[QS>QD].
- prevailing price of the good is equal to the equilibrium price[QD=QS].
___3. If the price of hamburgers increase, the demand for hot dogs[substitute]will:
- remain unchanged. b. shift to the right(increase). c. shift to the left(decrease).
___4. Which of the following statements iscorrect?
- A decrease in the price of Hondas will increase the demand for Fords(substitutes).
b. An increase in income will decrease the demandfor spam(aninferior good).
c. A decrease in income will decrease the demand for an spam(an inferior good).
d. An increase in the price of C will increase the demand for complementary product D.
___5. In moving along a stable demand or supply curvefor gasoline,
what is notheld constant?[What is changing?]
a. income b. taste c. price of gasoline d. resource cost of gasoline
___6. Which of the following will not shift the supply curve?
a. change in resource costb. change in consumer taste
c. change in the number of producersd. an increase in taxes
___7. A decrease inproductprice will cause:
a. QD to decrease b. QS to increase c. QD to increase d. increase in demand
___8. If theprice of apple pie decreases, thedemand curve for ice cream[complement] will:
a. remain unchanged b. shift to the right(increase) c. shift to the left(decrease)
___9. If rethread tires areinferior goods, an increase inincome will:
a. decrease D, decrease P, & increase Q.c. increase S, decrease P, & increase Q.
b. decrease D, decrease P, & decrease Q.d. increase D. increase P, & increase Q.
___10. An increase in the price of Snickers will result in a(n):
a. increase in the demand for Snickers.b. decrease in the demand for Snickers.
c. increase in QD for Snickers.d. decrease in QD for Snickers.
___11. A leftward shift of the supply curve might be caused by:
a. decrease in resource cost.b. more firms entering an industry.
c. decrease in subsidies.d. a decrease in consumer incomes.
___12. Consumer expectations that the price of digital cameras will decrease
sharply in the future will:
a. increase S, increase P, & increase Q.c. increase D, decrease P, & increase Q.
b. decrease D, increase P, & decrease Q.d. decrease D, decrease P, & decrease Q.
___13. If bologna is an inferior good, an increase in consumer incomes will:
a. not affect the sales of bologna.b. shift the demand curve for bologna to the left.
c. result in a shortage of bologna. d. shift the demand curve for bologna to the right.
___14. An increase in the price of hamburgers resulted in an increase in the
demand for hotdogs. This indicates that hamburgers and hotdogsare:
a. substitute goods b. complementary goods. D. inferior goods.
___15. An “increase in the quantity supplied[QS]” suggests a:
a. rightward shift of the supply curve. b. movement up along the supply curve.
c. movement down along the supply curve.d. leftward shift of the supply curve.
___16. An increase in the price of corn will shift the (demand/supply) curve for
wheat[alternative output] to the (left/right).
a. demand/left b. demand/right c. supply/left[decrease] d. supply/right[decrease]
___17. Which of the following will not cause the supply curve to shift?
a. a change in resource costs.b. a technological change.
c. a change in the price of the good.d. change in the prices of alternative outputs.
___18. What will cause an increase in demand for Fuzzy Wuzzys?
a. decrease in the price of Fuzzy Wuzzysb. increase in the price of Fuzzy Wuzzys
b. increase in subsidies for Fuzzy Wuzzysd. increase in taste for Fuzzy Wuzzys
___19. What will cause a decrease in supply for “oranges”?
a. decrease in the price of orangesb. an increase in the price of oranges
c. increase in the cost of labor producing orangesd. decrease in consumer taste for oranges
___20. What will cause an increase in QS for “oil”?
a. decrease in the price of oilb. an increase in the price of oil
c. increase in taste for oild. increase in market size(# of consumers)
___21. An increase in the price of hotdogs results in a decrease in demand
formustard. Therefore, these two products must be:
a. complementary goods b. substitute goods c. independent goods
____22. If the price of bagels increase, the demand curve for the substitute
breadwill:
a. shift to the left. b. shift to the right. c. remain unchanged. d. decrease.
____23. When the price of a product decreases, and consumers are able to buy
more would be an example of the:
a. product effect b. substitution effect c. income effect d. none of these
____24. Producer expectations that kangaroo meat(“roo steaks”) will rise
sharplyin the near future will:
a. increase D, increase P, increase Q.c. decrease S, increase P, decrease Q
b. decrease D, decrease P, decrease Q.d. increase S, decrease P, increase Q.
____25. If the price of ostrich burgers increases, the demand for the substitute
emuburgerswill:
a. decrease D, decrease P, decrease Q.c. increase S, decrease P, increase Q.
b. increase D, increase P, increase Q.d. decrease S, increase P, decrease Q.
____26. The reason “talk is so cheap” is that:
a. demand is much greater than supply. b. supply is much greater than demand.