Supply and Demand Concepts

1. The primary purpose of the passage is to:

• criticize businesses for raising prices during shortages.

• argue that government intervention is always harmful to markets.

• explain how supply and demand influence prices and markets.

• describe the history of the smartphone industry.

2. According to the passage, which of the following best illustrates a shift in the supply curve?

• Producers offering fewer smartphones because microchip shortages increase costs.

• Consumers deciding to buy fewer smartphones due to a price increase.

• The release of a popular new smartphone model that increases consumer interest.

• Consumers switching to a different brand of smartphone.

3. Which of the following statements about market equilibrium is supported by the passage?

• It is a stable point where supply equals demand.

• It results in shortages of goods.

• It always leads to lower prices.

• It happens only in government-controlled markets.

4. The author mentions price ceilings and floors mainly to:

• describe consumer behavior in response to price changes.

• argue that markets function best without any controls.

• explain how producers maximize profits.

• highlight government strategies for influencing prices.

5. Which statement best summarizes the passage’s overall tone?

• Cautionary and skeptical

• Critical and persuasive

• Neutral and informative

• Humorous and informal