Supply, Demand, & Price Unit Test (B)

Imagine the price of potato chips increases from $1 to $2 per bag. According to the law of demand, what will likely happen?

• People will buy more chips
• People will buy fewer chips
• The store will supply fewer chips
• Wages will increase

A group of friends loves eating at a fancy new restaurant, but they can only afford it once a year. What does this tell you about demand?

• Demand depends only on liking the product
• Demand depends only on price
• Demand depends on both willingness and ability to pay
• Demand depends on the restaurant’s supply

Assume the graph below is for designer handbags, a normal good. Which of the headlines could indicate the shift below occurring in the market for designer handbags?

• A celebrity starts promoting designer handbags on social media
• Designer handbag prices are expected to increase next month
• Average household incomes drop due to layoffs
• Population in the city surges due to new job opportunities

A local hospital reports a baby boom. What will likely happen to the demand for baby diapers?

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After local wages rise, a shoe store notices more teens are buying expensive sneakers. What’s the demand shifter?

• Change in the market size
• Change in consumer expectations
• Change in price of substitute goods
• Change in price of complementary goods
• Change in income

Viral food influencers promote vegan diets, making them more popular among young adults. What happens to the demand for vegan products?

• Increase in demand due to tastes and preferences
• Decrease in demand due to consumer expectations
• Increase in demand due to price of complements
• Decrease in demand due to market size

Which situation best reflects the impact of complementary goods on demand?

• Price of milk rises, so demand for cereal falls
• Income rises, so demand for luxury cars increases
• Tastes change, making fitness trends more popular
• Population increases, boosting demand for housing

As people lose jobs during a recession, more shoppers visit thrift stores instead of buying new clothes. How would you classify secondhand clothing?

• Normal good
• Inferior good

In gaming, early levels can be exciting. However, as players advance and unlock more content, the thrill often fades, making achievements feel less rewarding. This example illustrates

• Law of supply
• Law of demand
• Law of increasing opportunity cost
• Law of diminishing marginal utility

People expect that new tariffs will raise smartphone prices next month. What happens to current smartphone demand?

• Demand increases now
• Demand decreases now
• Demand stays unchanged
• Supply increases now