Supply and Demand Review

Use this diagram to identify which of the following would cause consumers to demand fewer slices of pizza.

• an increase in the supply of pizza slices

• a decrease in the supply of tacos

• an increase in the price of pizza slices

• a decrease in the price of pizza slices

Which of the following BEST restates the point:

"The most famous law in economics, and the one that economists are most sure of is the law of demand."

• The way markets respond to a change in price is highly predictable

• The laws of demand and supply are easy to understand

• Economists rely on laws as much as any other profession

• Economic theory rests almost entirely on speculation about how consumers behave.

Use the image for question 3 to answer this question.

Based on the diagram, which of the following situations reflects the substitution effect resulting from a special sale on Z-Ball brand golf balls?

• The price of Z-Balls increases when the demand for them increases

• The price of Z-Balls decreases when the demand for them increases

• Consumers reject the Z-Balls, assuming they are an inferior product

• Consumers purchase Z-Balls rather than the brand they normally buy

How many slices of pizza per day would you expect a pizzeria in this market to sell if it were pricing its slices at $3.50

• 150

• 175

• 200

• 225

Use the graph on question 5 to answer this question.

Jenna is a plant lover. She could afford to buy a new houseplant every 3 months. Something has changed that has caused her demand curve for plants to shift right, what is the most likely explanation.

• Jenna has decided that she has to sell some of her houseplants

• Jenna has switched from buying plants to buying knickknacks

• Jenna now buys a new houseplant every 6 months

• Jenna now buys a new houseplant every month.

Which of the following is the likely result of a successful advertising campaign for a video game?

• A supply curve that has shifted to the right

• A supply curve that has shifted to the left

• A demand curve that has shifted to the right

• A demand curve that has shifted to the left

A wildfire has put a major lumber producer out of business. How might an economist show one consequence of this in a graph?

• A supply curve that has shifted to the right

• A supply curve that has shifted to the left

• A demand curve that has shifted to the right

• A demand curve that has shifted to the left.

Use the graph on #8 to answer this question

Which of the following price/output points would be found on the market supply schedule used to create the market supply curve?

• $2.00 and 150

• $5.00 and 300

• $5.00 and 3,000

• $2.00 and 2,000

Use the graph on #9 for this question.

How does the addition of the fifth worker affect the number of beanbags produced per hour?

• It increases production by 5 beanbags

• It decreases production by 5 beanbags

• It increases marginal returns by one beanbag

• It decreases marginal returns by two beanbags.

Use the graph on #10 to answer this question.

Based on the graph, after adding an 8th worker, what is the beanbag company's owner MOST LIKELY going to do?

• Order more beans for making beanbags

• Order more cloth for making beanbags

• Reduce the workforce

• Hire more workers.