Supply and Demand AP Macro Quiz

What is the law of supply and demand?

• The price of a good will fall when the demand for it is less than the supply

• The price of a good will remain constant regardless of the demand and supply

• The price of a good will rise when the demand for it is less than the supply

• The price of a good will rise when the demand for it is greater than the supply, and the price will fall when the supply is greater than the demand.

Explain the concept of demand curve and supply curve.

• The supply curve shows the relationship between the price of a good and the quantity demanded by consumers.

• The demand curve shows the relationship between the price of a good and the quantity supplied by producers.

• The demand curve shows the relationship between the quantity supplied by producers and the price of a good.

• The demand curve shows the relationship between the price of a good and the quantity demanded by consumers, while the supply curve shows the relationship between the price of a good and the quantity supplied by producers.

How does a change in price affect the quantity demanded and supplied?

• The quantity demanded and supplied are directly related to price.

• The quantity supplied is not affected by price.

• The quantity demanded and supplied are inversely related to price.

• The quantity demanded is not affected by price.

What are the factors that can cause a shift in the demand curve?

• Changes in consumer income, prices of related goods, consumer preferences, population, and expectations about future prices and income.

• Weather conditions

• Technological advancements

• Changes in government policies

What are the factors that can cause a shift in the supply curve?

• Changes in consumer preferences

• Changes in production costs, technology, government policies, and the number of sellers in the market.

• Weather conditions

• Exchange rates

Explain the concept of equilibrium price and quantity.

• Equilibrium price and quantity is always the highest price and lowest quantity

• Equilibrium price and quantity is not affected by changes in supply and demand

• The equilibrium price and quantity is the point where the supply and demand curves intersect.

• The equilibrium price and quantity is determined by the government

What happens to price and quantity when there is a shortage in the market?

• Price decreases, quantity stays the same

• Price decreases, quantity increases

• Price increases, quantity decreases

• Price stays the same, quantity increases

What happens to price and quantity when there is a surplus in the market?

• Price increases, quantity decreases

• Price stays the same, quantity decreases

• Price increases, quantity stays the same

• Price decreases, quantity increases

How does the market reach equilibrium price and quantity?

• Price controls

• Government intervention

• Supply and demand curves intersect

• Random chance

What are the effects of a change in demand on equilibrium price and quantity?

• Price increases, quantity decreases

• Both increase

• Both decrease

• Price decreases, quantity increases