TEST 4. The Demand and Supply. PV

Which of the following is considered a demand shifter?

• The price of the good itself.

• The price of a substitute good.

• The technology used in production.

• The number of sellers in the market.

What economic term refers to the situation in which resources are insufficient to meet all wants and needs?

• Scarcity

• Demand

• Surplus

• Opportunity cost

What is the law of demand?

• As the price of a good rises, the quantity demanded increases

• As the price of a good rises, the quantity demanded decreases

• There is no relationship between price and quantity demanded

What is the present value of $1,000 to be received in 3 years with an annual discount rate of 5%?

• $863.84

• $952.38

• $848.93

When representing supply and demand on a graph, what does the intersection of the two curves indicate?

• Maximum price

• Equilibrium price and quantity

• Price floor

What does the law of demand state about the relationship between price and quantity demanded?

• Inverse relationship

• Direct relationship

• No relationship

In economics, what is the term used to describe a table that shows the quantity of a good that buyers are willing and able to purchase at various prices?

• Demand schedule

• Supply schedule

• Price schedule

What is the law of supply?

• As the price of a good rises, the quantity supplied increases

• As the price of a good rises, the quantity supplied decreases

• There is no relationship between price and quantity supplied

In the context of present value, what does 'r' represent in the formula?

• Annual interest rate

• Number of periods

• Future value

Which of the following statements is true about the relationship between present value and the discount rate?

• Higher discount rate leads to lower present value

• Lower discount rate leads to lower present value

• Discount rate does not affect present value