Supply and Demand Worksheet Questions

A change in the price of a good itself will cause a shift in the demand curve for that good.

• True

• False

Which term best describes the consequence of a decrease in the cost of raw materials for producers of a good?

• A movement down along the supply curve (increase in quantity supplied)

• A shift of the supply curve to the right (increase in supply)

• A movement up along the supply curve (decrease in quantity supplied)

• A shift of the supply curve to the left (decrease in supply)

If consumers' average income increases, the demand curve for normal goods will shift to the left.

• True

• False

An increase in the price of beef leads to consumers buying more chicken. In this example, beef and chicken are considered what type of goods?

• Complementary goods

• Inferior goods

• Normal goods

• Substitute goods

The equilibrium price is the price where the quantity demanded equals the quantity supplied.

• True

• False

A government imposing a new tax on the production of cars will cause the supply curve for cars to shift to the left.

• True

• False

Which factor is a determinant of supply and NOT a determinant of demand?

• The price of substitute goods

• Consumer tastes and preferences

• Technology used in production

• Consumer income

When the supply curve shifts to the left, and the demand curve remains unchanged, the new equilibrium will have:

• A lower price and a higher quantity

• A lower price and a lower quantity

• A higher price and a lower quantity

• A higher price and a higher quantity

A shift in the demand curve to the right is also known as an increase in demand.

• True

• False

If the price of coffee suddenly decreases, what is the most likely immediate effect on the market for tea (assuming they are substitutes)?

• The demand curve for tea shifts to the right

• The demand curve for tea shifts to the left

• There is a movement down the demand curve for tea

• The supply curve for tea shifts to the right