Chapter 8 - Supply & Demand

When producers choose to produce higher quantities at higher prices, the relationship between price and quantity is....

• inverse
• coincidental
• infinite
• direct or positive

Which of the following would cause an increase in supply?

• an increase in the price of the product
• an increase in the cost of production
• a change in consumers income
• an improvement in technology

What will happen when downward pressure is applied to a price of a product.

• Less of a shortage
• Less of a surplus
• Both of these
• None of these

Two important changes take place when there is an increase in demand. What are they?

• Prices rise and quantity exchange rises
• Prices rise and quantity exchange stays the same
• Prices rise and quantity exchange goes down
• Prices decline and quantity exchanges rises.

If demand stays the same and supply decreases, we can expect what two things to happen.

• Price go down and quantity exchanged stays the same
• Prices go down and quantity exchanged goes down
• Prices go up and quantity exchanged is more
• Prices go up and quantity exchanged is less

? is the quantity that is both demanded and supplied at the equilibrium price.

• Market prices
• Equilibrium price
• Equilibrium quantity
• None of the above

An effective price floor must be set above equilibrium, resulting in:

• a shortage
• a surplus
• limited choices
• None of the above

Market forces will cause the the price to increase if a shortage exists in the market.

• True
• False

Government price controls do not help the economy achieve equilibrium in a market system.

• True
• False

A 10K road race is approx. how many miles?

• 3.1 miles
• 6.2 miles
• 9.3 miles
• 11 miles