Demand and Supply Quiz

Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

• It would decrease.

• It would increase.

• It would be unaffected.

• There is insufficient information given to answer the question.

A higher price for batteries would tend to

• increase the demand for flashlights.

• decrease the demand for electricity.

• increase the demand for electricity.

• increase the demand for batteries.

What will happen in the rice market if buyers are expecting higher prices in the near future?

• The demand for rice will increase.

• The demand for rice will decrease.

• The demand for rice will be unaffected.

• The supply of rice will increase.

Holding all else constant, a higher price for ski lift tickets would be expected to

• increase the number of skiers.

• decrease demand for skis.

• decrease the demand for other winter recreational activities.

• decrease the supply of ski resorts.

The movement from point A to point B on the graph shows

• a decrease in demand.

• an increase in demand.

• an increase in quantity demanded.

• a decrease in quantity demanded.

When the price of a good or service changes,

• there is a movement along a stable demand curve.

• demand shifts in the opposite direction.

• demand shifts in the same direction.

• supply shifts in the opposite direction.

On the graph, the movement from S to S₁ could be caused by

• a decrease in the price of the good.

• an increase in income.

• an increase in input prices.

• an improvement in technology.

If, at the current price, there is a shortage of a good,

• the price is below the equilibrium price.

• the market can be in equilibrium.

• sellers are producing more than buyers wish to buy.

• All of the above answers are correct.

According to the graph, equilibrium price and quantity are

• $7,20.

• $7,60.

• $5,40.

• $3,60.

According to the graph, at a price of $7,

• there would be a shortage of 40 units.

• there would be a surplus of 40 units.

• there would be a surplus of 20 units.

• the market would be in equilibrium.