Supply & Demand

When the price of a product increases, there is

• a shift in demand

• movement along the demand curve

• a change in elasticity of demand

• no effect on quantity demanded

On the demand curve, price and quantity demanded are

• inversely related P ^ Q V

• directly related P ^ Q V^

• unrelated

• not revelant

During the Dust Bowl of the 1930s, many farmers' agricultural goods were destroyed. What happened to the market for agricultural goods? (hint what are the factors for supply/demand?)

• Increase in demand

• Decrease in demand

• Increase in supply

• Decrease in supply

What is the Law of Supply?

• When demand goes up, supply decreases

• Supply shifts to the right due to technology

• When price increases, quantity supplied decreases

• When price increases, quantity supplied increase

Which of the following explains the Law of Demand?

• When prices go down, people have an increased income.

• When the price of a good increases, people tend to buy substitutes instead.

• People prefer inferior goods during a recession

• People often buy eggs and bacon together

Which of the following pairs of goods are substitutes?

• Jelly and Jam

• Eggs and Bacon

• Apples and Broccoli

• Mugs and Candles

Which of the following pairs of goods are complements?

• Jelly and Jam

• Eggs and Bacon

• Apples and Broccoli

• Mugs and Candles

Assume peanut butter and jelly are complementary goods. When the price of jelly increases, what will happen to the demand for peanut butter?

• It will decrease

• It will increase

• It will remain constant

• Complementary goods only affect the supply curve

The cost of wood increases sharply. What happens to the suppy for pencils?

• It will increase due to producer expectations

• It will decrease due to producer expectations

• It will increase due to cost inputs/

• It will decrease due to cost of inputs

War has broken out! What happens to the market for weapons?

• Supply increases due to number of producers

• Supply increases due to changes in technology

• Supply increases due to international events

• Demand decreases due to government policy