Microeconomics Test Review

As the price of an item increases, the quantity demanded

• Increases

• Decreases

• Remains the same

• Cannot be predicted

A supply curve shows the relationship between quantity supplied and

• Demand

• Production costs

• Profit

• Price

A demand curve shows the relationship between

• Price and supply

• Price and quantity demanded

• Price and profit

• Supply and demand

Supply is influenced by

• The cost of natural resources

• The cost of human resources

• Profitability of other options

• All of the above

The equilibrium price is the price at which

• Quantity supplied equals quantity demanded

• Suppliers make a profit

• Suppliers lose money

• Demand causes prices to rise

Complements are products that can

• Be substituted for each other

• Maintain a high demand

• Maintain a high price

• Be used in combination with each other

All of the following cause shifts in demand except

• Increase in consumer income

• Price changes

• Consumer taste changes

• Change in the number of consumers in the market

A price ceiling is likely to cause a

• Shortage

• Surplus

• Lower demand

• Higher equilibrium price

Supply and demand curves cross at the

• Surplus point

• Market clearing price (equilibrium price)

• Shortage point

• Supply price

Which of the following would NOT shift the Demand for beef?

• a widely publicized study which proves that eating beef increases one's bad cholesterol

• an effective advertising campaign by pork producers

• a decrease in the cost of raising cattle

• a change in the incomes of beef consumers