Supply and Demand Review

Which statement describes the law of demand?

• As prices rise, quantity demanded decreases

• As prices rise, demand decreases.

• As prices fall, quantity demanded decreases.

• As prices fall, demand decreases.

The amount of a good or service that producers are willing and able to sell at all possible prices during a given period of time.

• Supply

• Demand

• Factor of Production

• Production

The market equilibrium price is the price at which

• surpluses depress the number of goods supplied

• shortages and surpluses will have no effect on the market

• the government will not intervene in the market

• the quantity demanded is the same as the quantity supplied

What is the Equilibrium Price?

• 1

• 2

• 3

• 4

The diagram represents a

• increase in demand

• decrease in demand

• change in quantity demand

• none of the above

The diagram represents a(n)

• increase in supply

• decrease in supply

• change in quantity supplied

• none of the above

The law of supply states that if the price of CD’s rise, suppliers will

• Supply more CDs
• Supply fewer CDs
• Quantity supplied will not change

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs
• Buy fewer CDs
• Quantity demanded will not change

Which of the following is NOT a determinant of the supply of peanut butter?

• The price of peanuts 
• The wages of peanut butter factory workers 
• The income of peanut butter consumers
• Existing peanut butter making technology

Due to a disappointing economy, Americans are cutting back on the family vacation road trips. What happens to the market for gasoline?

• Demand for gasoline will decrease 
• Demand for gasoline will increase
• Demand for gasoline will stay the same