Supply and Demand Practice Quiz 2

A market is said to be in equilibrium when

• when demand is higher than the supply

• when demand is lower than the supply

• when the demand and supply quantities are equal

• when the supply is doubled the demand

What happens to price when the market has a surplus

• price drops

• price stays the same

• price increases

• price triples

Which statement describes the law of demand?

• As prices rise, quantity demanded decreases

• As prices rise, demand decreases.

• As prices fall, quantity demanded decreases.

• As prices fall, demand decreases.

Which explains why a supply line is upward sloping?

• the Law of Demand states there is an indirect relationship between price and quantity

• the Law of Supply states there is a direct relationship between price and quantity

• the Law of Supply compares marginal costs and marginal benefits in a constant rate

• the Law of Demand shows a positive relationship between two goods, creating the slope

When supply and demand intersect on the graph is called?

• demand curve
• equilibrium
• elasticity
• supply curve

Suppose you have a football trading card that everyone else has. Your friends probably won't give you much for it. The supply of that card is high, and the demand for it is low. What will happen to the price of that card.

• The price will go up.
• The price will go down.

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

Which of the following is NOT a determinant of the supply of peanut butter?

• The price of peanuts 
• The wages of peanut butter factory workers 
• The income of peanut butter consumers
• Existing peanut butter making technology

Which of the following will cause an increase in demand for snowboards?

• More costly production methods 
• A decrease in the price of lift tickets at resorts in Colorado 
• A decrease in consumer income   
• A decrease in the population 

What does a “surplus” (extra amount) of goods in a market imply?

• Prices are too high
• Prices are too low
• Supply is too low
• Demand is too high