Econ Supply & Demand Test

What does it mean when the demand for a product is inelastic?

A price increase does not have a significant impact on buying habits.

Which of the following is the best example of the law of supply?

A sandwich shop increases the number of sandwiches they supply every day when the price is increased.

What table lists the quantity of a good that a person will buy at different prices?

a demand schedule

A complement is

a good that is always used with another good

What is the best way to correct a shortage in the market

Increase the price

Which of the following is an example of a good with an inelastic supply?

apples

When demand increases and supply remains constant, what happens to equilibrium price and quantity?

Price increases, quantity increases

Which of the following leads to an increase in supply?*

an decrease in the cost of raw materials

 

The price of movie tickets in town has risen from $10 to $13.  What is the most likely effect of the change in price?

The quantity demanded for movie tickets will decrease.

 

If the government provides subsidies to a producer, what will likely happen to supply?

The supply curve shifts to the right

A producer's main goal is to

make a profit.

Mr. Menlove has $50 to spend. He is deciding between buying a concert ticket or a new pair of shoes. He chooses the concert ticket. What is the opportunity cost of his decision?

The new pair of shoes he could have bought

Which of the following scenarios best illustrates the concept of Substitute Goods?

The price of coffee increases, leading to a rise in tea sales

All of the following will change overall demand EXCEPT*

the change in price of the item.

What is the primary role of entrepreneurs in the economy?

To assemble resources and create new goods and services

What factor has the greatest influence on elasticity and inelasticity of supply?

time

What is a basic principle of the law of demand?

When a good’s price is lower, people will buy more of it.

Which of these events could permanently shift an individual’s demand curve for umbrellas to the right?

He moves from a dry, desert community to a rainy city by the ocean.

If both supply and demand increase at the same time, what will happen to equilibrium price?

It may increase, decrease, or stay the same depending on the size of the shifts

 

Which of the following scenarios would most likely cause a shift in the demand curve to the right?

A positive change in consumer preferences

Which economic principle states that people must make choices because resources are limited?

Scarcity forces trade-offs

which of the following best describes an opportunity cost?

The value of the next best alternative foregone

 

Which of the following is not considered a factor of production?

money

According to the law of demand, when the price of a good increases, the quantity demanded generally:

decreases

Which of the following is an example of government influence on supply?

subsidies

Which of the following best describes the law of supply?

As price increases, quantity supplied increases

Which of the following factors is not likely to shift the supply curve?

A change in consumer income

A surplus occurs when:

The quantity supplied exceeds quantity demanded

Which of the following is an example of lower production costs brought about by the use of technology?

the use of e-mail to replace slow surface mail

Which of these events would indicate a movement along a supply curve for batteries?

Battery manufacturers raise the price of eight AA batteries from $3.50 to $3.95 a set.

When the selling price of a good goes up, what is the relationship to the quantity supplied?

It becomes practical to produce more goods

A new study finds that drinking coffee improves memory and concentration. At the same time, a drought has affected coffee bean production. What is the likely effect on the equilibrium price and quantity of coffee?

Price increases, quantity supplied decreases

What is the purpose of a price ceiling set by the government?

To prevent prices from going too high for consumers

What is a company’s total revenue?

the amount of goods a company can expect to sell

Which of the following events could cause the demand curve for sports magazines to shift to the right?

A star basketball player interests thousands of people in professional sports for the first time.