2. Demand, Supply & Equilibrium

All of the following will cause a shift of the demand curve for a good except

• a change in income.

• a change in the price of the good

• a change in the price of a closely related good.

• a change in preferences.

A demand curve is usually drawn on the assumption that

• demand is not affected by the price of the good.

• factors influencing demand other than price are held constant

• consumers buy whatever they want.

• people buy more of a good when its price is raised.

If the price for a product rises, then, ceteris paribus

• supply will increase (supply curve will shift to the right).

• the demand curve will shift to the left.

• quantity supplied will fall.

• quantity demanded will fall.

A shift to the left of a demand curve could be due to a

• rise in the price of a complement.

• rise in the price of a substitute.

• fall in the price of the good.

• fall in the quantity supplied.

Which of the following is not a factor affecting demand?

• Price

• Consumer income

• Consumer preferences

• Number of sellers

If goods A and B are close substitutes, a decrease in the price of good A would cause the

• demand curve for good A to shift to the right.

• demand curve for good A to shift to the left.

• demand curve for good B to shift to the right.

• demand curve for good B to shift to the left.

The discovery of an improved production technique would result in a

• A movement upwards along the supply curve.

• A movement downwards along the supply curve.

• A shift to the left to a new supply curve.

• A shift to the right to a new supply curve.

The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises,

• the demand curve shifts rightward.

• the demand curve shifts leftward.

• there is a movement down along the demand curve to a larger quantity demanded.

• there is a movement up along the demand curve to a smaller quantity demanded.

"Market equilibrium" is achieved

• only after government intervention.

• at a price at which quantity demanded equals quantity supplied.

• when there is an equal number of buyers and sellers in the market.

• when there no shortage of the commodity.

Consider the market for mobile phones. Which of the following shifts the demand curve leftward?

• studies showing using mobile phones can cause brain cancer.

• an increase in the price of mobile phones.

• a decrease in the quantity demanded of mobile phones.

• an increase in the services provided by mobile phones, such as text messaging.