Chapter 20 Supply, Demand and Competition

1. Which definition fits in the supply box?

• the quantity of a good or service that a buyer is willing and able to purchase at a specific price.
• the quantity of a good or service that a business is willing and able to make available for sale at a specific price.

2. Which definition fits in the demand box?

• the quantity of a good or service that a buyer is willing and able to purchase at a specific price.
• the quantity of a good or service that a business is willing and able to make available for sale at a specific price.

3. What happens to price when the situation in the graphic occurs?

• price goes up
• price goes down
• price stays the same

4. What happens to price when the situation in the graphic occurs?

• pice goes up
• price goes down
• price stays the same

5. Peppy Pizzeria sells pizza for $2.00 per slice. If Peppy Pizzeria increases the price to $3.00 per slice, what will most likely occur?

• Peppy Pizzeria will sell less pizza.
• Peppy Pizzeria will sell more pizza.
• Peppy Pizzeria’s pizza will taste better.
• Peppy Pizzeria will start selling hamburgers.

This is a series of two related questions. The text and photographs are the same for both questions. In 1973, many Arab countries established an oil embargo. They refused to export oil to countries that supported Israel in the Yom Kippur War. The embargo was against the United States, Canada, United Kingdom, Netherlands, and Japan. PART A 6. How did the embargo impact the supply of oil in the United States?

• oil supply increased
• oil supply decreased
• oil supply stayed the same

7. How did the embargo impact the price of oil in the United States?

• oil prices increased
• oil prices decreased
• oil prices stayed the same

8. Producers often compete for the same consumers. How does increased competition impact the price of goods and services?

• price goes up
• price goes down
• price stays the same
• goods and services become free

9. Mayville is a small town with just one gas stateion. The gas station charges about 20 cents more per gallon than the gas stations in a larger town 15 miles away. Mayville residents want their local gas station to reduce its prices. Which action would most likely cause the mayville gas station to lower its prices?

• more people move to Mayville
• a new gas station opens in Mayville
• a storm damages a nearby oil pipeline
• the residents of Mayville sue the gas station

10. Predict which of these outcomes is most likely to occur as a result of a severe freeze that destroys 90% of Florida's orange crop.

• the supply of oranges will increase
• the price of apple juice will decrease
• the demand for oranges will increase
• the price of orange juice will increase