Supply, Demand, and Equilibrium Assessment Questions

According to the law of demand, a decrease in price

• Shifts the demand curve to the left.

• Shifts the demand curve to the right.

• Does not shift the demand curve, but results in a movement ALONG the demand curve showing an increase in qty demanded.

• Does not shift the demand curve, but results in a movement ALONG the demand that show an increase in demand.

• There will be no change.

All of the following will shift the demand curve for oranges to the RIGHT except:

• An increase in the price of apples, a substitute for oranges.

• A new study shows that drinking fresh orange juice reduces the likelihood of kidney stones.

• A new technology for orange picking makes harvesting oranges cheaper.

• Consumers expect higher prices for oranges next month due to hurricanes destroying crops.

• All of the above shift the demand curve to the RIGHT

An increase in the price of roses will:

• Definitely result in a shift to the right of the supply curve.

• Definitely result in an increase in the quantity demanded of roses.

• Definitely result in a decrease in the quantity demanded of roses.

• Definitely result in a shift to the left of the demand curve.

• Both A and C are true.

According to the law of supply, sellers will be more likely to increase their quantity supplied when

• They can sell their goods cheaply.

• When there are lots of suppliers in the market.

• When they are the only supplier of a good.

• When the selling price increases.

Demand for toilet paper soared at the beginning of the pandemic. Some retailers maintained the same price for toilet paper. This generated a (a)   because the quantity supplied was (b)   than the quantity demanded.

• Shortage

• Surplus

• greater

• less

When the quantity demanded is less than the quantity supplied, there is a

• Shortage

• Surplus

• Market equilibrium

• Price floor