Supply & Demand

Thousands of people leave a small town due to a factory closing down.  Sales at the local grocery store become slow. What causes this change?

• Prices or availability of substitutes
• Prices or availability of complementary goods
• Change in the weather or season
• Change in the number of buyers

The market equilibrium price is the price at which

• surpluses depress the number of goods supplied
• shortages and surpluses will have no effect on the market
• the government will not intervene in the market
• the quantity demanded is the same as the quantity supplied

What is the Equilibrium Price?

• 1
• 2
• 3
• 4

Goods that are bought and used together are 

• complementary goods
• substitute goods
• income goods
• unrelated goods

The diagram represents a(n)

• increase in supply
• decrease in supply
• change in quantity supplied
• none of the above

The diagram represents a

• increase in demand
• decrease in demand
• change in quantity demand
• none of the above

Assume the image is showing the market for apples.  Which of the headlines could indicate the pictured shift is occurring in the market?

• Pesticides on apples linked to mouth cancer.
• Storms destroy apple orchards.
• An apple a day really does keep the doctor away.
• New genetic strain leads to apple trees that produce twice as many apples.

The Law of Demand says that price and quantity have a(n)

• direct relationship
• inverse relationship
• marginal utility
• diminishing utility

Which statement expresses a central idea of how the laws of supply and demand work?

• The government sets the prices for goods and services.
• Prices are determined by the interaction of producers and consumers.
• Consumers alone determine the prices for goods and services.
• Technology dictates the prices charged for goods and services.

Mr Tonkli goes to the ticket booth to buy tickets for a Cavs game. Mr. Tonkli is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available? 

• The arena forgot to print enough tickets.
• The supply of tickets was greater than the demand.
• The arena charged too much money for each ticket.
• The demand for tickets was greater than the supply.