Supply and Demand Quiz

What is the definition of supply?

• The maximum amount of a product that sellers are willing and able to provide over some time period at various prices

• The maximum amount of a product that producers are willing and able to provide over some time period at one price

• The maximum amount of a product that buyers are willing and able to purchase over some time period at various prices

• The maximum amount of a product that buyers are willing and able to purchase over some time period at one price

Oliver and Evelyn are at a candy store. The price of their favorite candy drops. According to the law of demand, what would likely happen?

• Oliver and Evelyn would want to buy more candy (As prices decrease, quantity demanded increases)

• Oliver and Evelyn would want to buy less candy (As prices decrease, quantity demanded decreases)

• Oliver and Evelyn would want to buy the same amount of candy (As prices increase, quantity demanded stays the same)

Imagine Abigail and Jose are running a lemonade stand. They are trying to figure out the relationship between the price of their lemonade and how much they sell. What does this scenario illustrate?

• The relationship between price and quantity demanded

• The relationship between price and quantity supplied

• The relationship between income and quantity demanded

• The relationship between price and income

What is the law of supply?

• As prices increase, quantity supplied decreases

• As prices increase, quantity supplied increases

• As prices decrease, quantity supplied increases

Avery is running a lemonade stand. They discover a new method to make lemonade that reduces their production cost. What happens to the supply of their lemonade?

• It decreases

• It increases

• It remains the same

• It fluctuates

Avery is running a lemonade stand. Suddenly, the price of their competitor Abigail's orange juice falls. What happens to the supply of Avery's lemonade?

• It fluctuates

• It remains the same

• It decreases

• It increases

Avery is running a lemonade stand. They are considering whether to accept a subsidy from their parents. What effect would this subsidy have on their lemonade supply?

• It has no effect on supply

• It fluctuates supply

• It increases supply

• It decreases supply

What happens to the supply curve for a product when the number of sellers in the market increases?

• It increases

• It decreases

• It fluctuates

• It remains the same

What happens to the demand for an inferior product when income increases?

• It decreases.

• It increases.

• It stays the same.

• It fluctuates.

What happens to the demand for a product when consumers expect it to be more expensive in the future?

• It increases.

• It decreases.

• It stays the same.

• It fluctuates.