Supply and Demand

As prices rise, sellers will offer more goods and services for sale.

• Supply
• Law of Supply
• Change in supply
• demand

The change in consumption resulting from a change in income

• substitution effect
• demand schedule
• Income effect
• none of the above

The Supply Curve is upward-sloping because

• As the price increases, so do costs
• As price increases, suppliers can earn higher profits or justify higher marginal costs to produce more.
• As the price increases, consumers demand less.
• None of the above

A shortage of a good is often a signal for a producer to

• lower the production of that good
• lower the prices of thay good
• raise the prices of that good
• shift production to another good

When a price ceiling is imposed above the equilibrium price

• a shortage results
• a surplus results
• the equilibrium outcome prevails
• there is not enough information to determine

Which of the following will not cause the demand for product K to change?

• 
  A change in the price of close-substitute product J
  
• 
  An increase in consumer incomes
  
• 
  A change in the price of K
  
• A change in consumer tastes
  

If the demand curve shifts to the right, then the supply curve move up and to the right

• true
• False

An increase in price of jelly causes a decrease in demand of peanut butter. The products are

• complements
• demand elastic
• unrelated
• subtitutes

An effective ceiling price will:

• result in a product shortage.
  
• induce new firms to enter the industry.
• clear the market.
  
• result in a product surplus.

An increase in the price of a product will reduce the amount of it purchased because:

• the higher price means that real incomes have risen.
• supply curves are upsloping.
  
• consumers substitute relatively high-priced for relatively low-priced products.
• consumers will substitute other products for the one whose price has risen.