Year 10 Supply and Demand

If the price of coffee increases, the demand for tea is likely to increase. In this scenario, what is the relationship between coffee and tea?

• They are substitute goods.

• They are inferior goods

• They are unrelated goods

• They are complementary goods

If the price of hot dogs decreases, the demand for hot dog buns is likely to increase. In this scenario, what is the relationship between hot dogs and hot dog buns?

• They are substitute goods

• They are unrelated goods

• They are complementary goods

• They are normal goods

According to the Law of Demand, what happens to the quantity of a good or service demanded when its price increases?

• The quantity demanded increases.

• The quantity demanded stays the same.

• The quantity demanded decreases.

• The quantity demanded first increases then decreases.

According to the Law of Supply, what happens to the quantity of a good or service supplied when its price decreases?

• The quantity supplied increases.

• The quantity supplied decreases.

• The quantity supplied stays the same.

• The quantity supplied first decreases then increases.

The point at which the demand and supply curves intersect is known as the:

• Breakeven point

• Price mechanism

• Market equilibrium

An increase in the number of producers of rain water tanks ____ the supply of rain water tanks and shifts the supply curve of rain water tanks ____.

• increases; right

• increases; left

• decreases; right

• decreases; left

Consumers are expecting the price of cars to rise in the future. How will this affect the level of demand now?

• It will increase

• It will decrease

• It will remain unchanged

• It depends on supply

What is the equilibrium price?

• $6 per pound

• $0.6 per pound

• $4 per pound

• $0.4 per pound

A new technological advancement has just been developed that significantly reduces the cost of producing each smartphone. Assuming all other factors remain constant, which of the following is the most likely outcome?

• The supply curve shifts to the left, resulting in a decrease in quantity and an increase in price.

• The supply curve shifts to the right, resulting in an increase in quantity and a decrease in price.

• The demand curve shifts to the right, resulting in an increase in both quantity and price.

• The demand curve shifts to the left, resulting in a decrease in both quantity and price.

What is the market equilibrium price?

• $30

• $28

• $20

• $38