Supply and Demand Quiz

Which of the following words is NOT part of the Circular Flow Diagram?

• Resources

• Investment

• Expenditures

• Income

• Business

According to ____________, when prices rise, demand decreases and when prices drop, demand increases.

• Law of Demand

• Law of Supply

• Demand

• Supply

According to ____________, when price rises, the quantity a seller is willing and able to sell will increase.

• Supply

• Law of Supply

• Demand

• Law of Demand

Which of the following is NOT a factor that shifts demand?

• marginal utility

• complements

• substitutes

• income

Which of the following is NOT a factor that shifts supply?

• technology

• disasters

• gov’t regulation

• consumer expectations

Headline: "Coffee Shown to Promote Good Gut Health!"

How will this information likely affect the demand curve for coffee?

• It will shift to the right, indicating an increase in demand as more people desire to buy coffee. .

• It will shift to the left, indicating a decrease in demand because people will despise coffee.

• It will remain unchanged.

• It will become vertical, indicating perfectly inelastic demand since everyone drinks coffee.

Congress Passes New “Sugar Tax”.

How will this information likely affect the supply curve for sugar?

• The supply curve for sugar will shift to the left because businesses will buy less for their goods and services since they are affected by the tax.

• The supply curve for sugar will shift to the right because businesses that sell sugar will make more money off of consumers.

• The supply curve for sugar will remain unchanged, because taxes only impact demand.

• The supply curve for sugar will become vertical because sugar is an inelastic product for businesses

Headline: "Price for Fresh Blueberries Skyrockets – Cold Weather to Blame."

 How will this information likely affect the demand curve for fresh strawberries?

• It will shift to the right, indicating an increase in demand because strawberries are a substitute for blueberries.

• It will shift to the left, indicating a decrease in demand because the price of blueberries went up.

• It will remain unchanged because the price of strawberries are not effected by the price of blueberries.

• It will become vertical, indicating perfectly inelastic demand.

"The President Approves Subsidy for Solar Energy Industry."

How will this information likely affect the supply curve for solar energy panels?

• The supply curve will shift to the right, indicating an increase in supply because the solar industry will use the subsidy to make investments in solar panel development.

• The supply curve will shift to the left, indicating a decrease in supply because the price of solar panels will increase as they are innovated.

• The supply curve will remain unchanged because their is not enough demand for them. .

• The supply curve will shift to the right, indicating an increase in supply because other industries will start creating their own solar panels to get the subsidy.

Which factor might cause an increase in the supply of a product?

• a decrease in productivity

• fewer sellers in the marketplace

• the introduction of new technology

• an increase in the cost of raw materials