Unit 2 supply and demand Economics Quiz

According to the law of supply,

• the lower the price the larger the quantity consumed.

• the higher the price the larger the quantity produced.

• if the price of a good rises some firms will produce less.

• if the price of a good falls new firms may enter the market.

Which of the following describes the substitution effect?

• As the price of a good falls, people will substitute other products.

• As the price of a good rises, people will substitute other products.

• As demand rises, people will substitute other products.

• As demand falls, people will substitute other products.

The law of demand says

• the higher the price, the more consumers will buy.

• the lower the price, the less consumers will buy.

• the lower the price, the more consumers will buy.

• the lower the price, the more consumers will substitute.

Which of the following is NOT an example of complements?

• peanut butter and jelly

• row boat and oars

• cell phone and a calculator

• electric shaver and charging

For most goods, a rise in people’s income means that there will be

• a substitution effect.

• a rise in prices.

• an increase in demand.

• a decrease in demand.

Which statement explains why prices rise in a market?

• Producers produce a quantity greater than consumers want to buy.

• Consumers buy much less of a good than they have in previous years.

• New producers enter the market.

• There is increased demand in the market

The equilibrium price and quantity in a graph

• the slope of the demand curve

• the slope of the supply curve

• the two highest points of the supply and demand curves

• the intersection of the supply and demand curves

How would you determine the equilibrium price of donuts?

• Find the lowest price of donuts

• Graph the supply and demand curves of donuts

• Find the company that sells the most donuts

What will happen if donuts are sold at $35 a dozen?

• A shortage exists and the price falls to restore equilibrium.

• A shortage exists and the price rises to restore equilibrium.

• A surplus exists and the price falls to restore equilibrium.

• A surplus exists and the price rises to restore equilibrium.

If the price of the donuts is below the equilibrium price, then

• the quantity demanded of donuts exceeds the quantity supplied and a surplus exists.

• the quantity supplied of donuts exceeds the quantity demanded and a surplus exists.

• the quantity demanded of donuts exceeds the quantity supplied and a shortage exists.

• the quantity supplied of donuts exceeds the quantity demanded and a shortage exists.