Market Equilibrium

To an economist, consumer demand means:

• Consumer able to afford, but unwilling to buy
• Consumer wants to buy, but may not have the money
• Consumer able to buy, but not at current price
• Consumer is willing and able to buy at current price

The basic principle of the law of demand is:

• Higher the price, the more consumers buy
• Lower the price, the less consumers will buy
• Lower the price, the more consumers will buy
• Lower the price, the more consumers will subsitute

Which of the following situations would cause a shift in the demand curve?

• suppliers' expectations of a price increase
• an increase in consumers’ income
• a change in government tax structure
• a change in technology

Not moving along the demand curve, but a change/shift in entire demand curve is a result of __.

• a change in something other than price
• a decrease in price
• a change in price and availability
• an increase in price

Price of hot dog buns rises; Demand curve for hot dogs shifts left. What could cause this?

• Supply for hot dogs increases
• Supply for hot dogs decreases
• Demand for hot dogs decreases
• Demand for hot dogs increases

When the price of an item increases, the quantity demanded ___?

• increases
• decreases
• reverses
• remains the same

What would be the effect of higher labor costs on the supply curve of turnip pies?

• the curve is not affected.
• It shifts to the right
• It reverses direction
• It shifts to the left

What is the basic principle of the law of supply?

• Lower the price, large the quantity consumed
• Higher the price, large the quantity produced
• If price of a good rises, some firms will produce less
• If price of good falls, new firms may enter the market

Which leads to an increase in supply?

• An increase in the cost of raw materials
• Diminishing marginal returns
• Change in the law of supply
• Decrease in the cost of raw materials

What would be the effect of lower labor costs on the supply curve of turnip pies?

• Shifts right
• Shifts left
• Reverses direction
• Curve is not affected