Supply & Demand Exam

Rohan runs a lemonade stand. When the number of lemonades he makes matches the number of lemonades customers want to buy, the curves intersect at the ______________ point.

• demand

• supply

• equilibrium

• quantity

Government often times will pay into businesses in order to keep them operating. Historically, farmers have received this type of government support which caused an increase in supply. This represents which of the following determinants of supply?

• input costs

• technology

• subsidies

• regulations

In 2011, Japan was devastated by a tsunami. As a result, there was a shortage of new Japanese cars on the market. This drove the price of used cars up.

• taxes

• supply shock

• technology

• regulations

You find out that sinkholes have plagued Isla's neighborhood. What could you expect would happen to the demand and prices for houses in Isla's neighborhood?

• increase/increase

• decrease/increase

• increase/decrease

• decrease/decrease

Emma runs a lemonade stand and notices that excess supply occurs when

• the quantity demanded is more than the quantity supplied

• the quantity demanded is the same as the quantity supplied

• the quantity supplied is less than the quantity demanded

• the quantity supplied is greater than the quantity demanded

Charlotte is discussing with her friends about the minimum wage set by the government. She explains that the minimum wage is an example of a

• equilibrium price

• price ceiling

• price floor

• pricey price

Abigail is studying economics and learns that a price ceiling is a government imposed ________________. She reads about an example of a price ceiling in her textbook.

• maximum amount that can be legally charged for an item/minimum wage

• minimum amount that can be legally charged for an item/minimum wage

• maximum amount that can be legally charged for an item/rent control

• minimum amount that can be legally charged for an item/rent control

The Mona Lisa would be considered to have inelastic supply because

• there is only one in the world and there is no way to produce more, no matter how much someone is willing to pay

• it is at equilibrium

• reprints are just as valuable as the original, making it easy to produce more

• it has very little demand for the product

What happens to the equilibrium price when there is an increase in demand but supply remains constant?

• It decreases

• It remains the same

• It increases

• It becomes zero

Abigail is studying the effects of government policies on markets. She learns that if a government imposes a tax on luxury cars, what is the likely effect on the supply curve for these cars?

• The supply curve shifts to the right

• The supply curve shifts to the left

• The supply curve remains unchanged

• The supply curve becomes vertical