Supply and Demand Quiz

Jeremy has $15,000 to spend on a new car. He found a car that cost $14,500, but he did not think the car was worth more than $12,000. The dealer told Jeremy that he has not been able to sell this model because other customers have expressed the same opinion as Jeremy. Does demand for this car exist?

• Yes, because consumers like the car but don't buy it.

• Yes, because consumers think the car is worth $12,000.

• No, because consumers do not have the buying power to purchase this car.

• No, because consumers are not willing to pay the price being asked for this car.

When the price of Bluetooth speakers increases, the quantity of Bluetooth speakers offered for sale will increase. This is an example of the law of

• supply

• demand

• cost of production

• standardization

Your business is selling more and more large-screen televisions each month. Applying the law of supply and demand, what do you expect to happen to the price and supply of these televisions over the next few months?

• The price will decrease, and supply will increase.

• The price will decrease, and supply will decrease.

• The price will increase, and supply will decrease.

• The price will increase, and supply will increase.

A local neighborhood has many houses for sale at a low price, but demand for the houses is low. What kind of market most likely exists in the neighborhood?

• Seller's

• Buyer's

• Inelastic

• Elastic

Orlando changes the price of one of his products, and this price change leads to a major change in the number of people who purchase the product. This means that demand for Orlando's product is

• competitive

• elastic

• Constant

• inelastic

Demand for a good is more likely to be elastic when the good is

• Imported

• a luxury

• a necessity

• inexpensive

Which of the following describes inelastic demand:

• Limited to luxury goods

• Fluctuating

• Not affected by price change

• Variable

Even though gasoline prices increased 15 cents per gallon as the result of the new gas tax, Alice continued to buy gas so that she could make her 20-mile drive to work. This is an example of what type of demand?

• Discretionary

• Elastic

• Inelastic

• Complementary

Most businesses strive to supply goods and services in direct proportion to

• cost of production

• supply

• Demand

• standard of living

For 20 years, Don owned a small grocery store. When several big box stores that sell groceries at discounted prices moved into the area, Don's sales declined, and he had to close his business. Which of the factors that affect supply affected Don's business?

• Government regulation

• Inelastic

• Complementary

• Number of producers