Supply and Demand

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

When there is a shortage the price will usually?

• rise

• fall

• remain the same

• equilibrium

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

Graph shows which of the following?
(actually use this graph to answer the question)

• a decrease in demand (shift) and a decrease in quantity supplied
• a decrease in demand (shift) and a decrease in supply
• a decrease in quantity demanded and a decrease in quantity supplied
• a decrease in quantity demanded and a decrease in supply (shift)

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

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs

• Buy fewer CDs

• Quantity demanded will not change

The law of supply states that if the price of CD’s rise, suppliers will

• Supply more CDs

• Supply fewer CDs

• Quantity supplied will not change