Supply and Demand Test

The demand curve represents the purchasing behavior of

• consumers

• producers

• consumers and producers

• laborers

The supply curve represents the selling behavior of

• consumers

• producers

• consumers and producers

• laborers

If the price of hot dogs decreases, what happens to the demand for hot dog buns?

• The demand stays the same, but quantity demanded increases

• The demand stays the same, but quantity demanded decreases

• The demand goes down

• The demand goes up

Which of the following summarizes the law of demand?

• 1. When the price of a product is higher, more consumers will purchase the product.

• 1. Inflation causes higher prices.

• When the price of a product is lower, consumers will purchase more of that product.

• Investors only care about profit.

On the demand curve, price and quantity demanded are

• 1. decreasing simultaneously.

• both measured on the x-axis.

• 1. directly related.

• 1. indirectly (inversely) related.

All of the following shift the demand curve EXCEPT:

• Complements

• Substitutes

• Number of Buyers

• Price

1. Which of the following will result in an increase in demand due to consumer expectations?

• 1. Consumers think it will be a cold winter, so they buy more blankets.

• 1. Producers think it will be a warm summer, so they produce more swimsuits.

• 1. Consumers suddenly love neon, so they buy more neon shoes.

• Consumer income rises so people buy fewer inferior goods.

Which two reasons are why the supply curve is upward sloping?

• Diminishing returns

• Incentives

• Profitability

• Tastes

The point at which Supply and Demand curves meet is known as what?

• Exchange Rate

• Perfection

• Equilibrium

• Center point

In a market, if quantity supplied is greater than quantity demanded what occurs?

• Shortage

• Surplus

• Scarcity

• Equilibrium