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Macro Section 2

Total questions: 10

Worksheet time: 15mins

Name
Class
Date
1.

The law of demand and a downward sloping demand curve tell us which of the following?

a)

There is a direct relationship between price and quantity supplied.

b)

There is a direct relationship between price and quantity demanded.

c)

There is a direct relationship between price and demand.

d)

There is an inverse relationship between price and quantity demanded.

e)

There is an inverse relationship between price and supply.

2.

What causes a change in quantity demanded?

a)

income

b)

The price of other goods in the marketplace

c)

price of the good

d)

interest rates

e)

expectations

3.

An increase in demand is shown on a graph by

a)

movement up the same demand curve

b)

shifting of the demand curve to the left

c)

movement down the same demand curve

d)

shifting if the demand curve to the right

e)

shifting of the supply curve to the right

4.

All of the following would decrease demand for the latest style furry boots except:

a)

The price of shoes goes down

b)

people prefer boots without fur

c)

the price of furry boots goes up

d)

people expect the boots to go out of style soon

e)

the weather forecast is for a very warm winter

5.

A decrease in the price of toothpaste in a tube can lead to a decrease in the purchase of toothpaste in a pump. This means

a)

toothpaste in a tube and in a pump are substitute goods and the demand for toothpaste in a tube will shift right.

b)

toothpaste in a tube and in a pump are complementary goods and the demand curve for toothpaste in a tube will shift right.

c)

toothpaste in a tube and in a pump are substitute goods and the demand curve for toothpaste in a pump will shift left.

d)

toothpaste in a tube and in a pump are complementary goods and the demand cure for toothpaste in a pump will shift left.

e)

toothpaste in a tube and in a pump are complementary goods and the demand curve for both toothpastes will shift left.

6.

Suppose the Food and Drug Administration has written an article stating green tea reduces heart disease and many other illnesses. What might be the immediate effects seen in the economy?

a)

The demand for green tea would increase, forcing the price to go up.

b)

The quantity demanded for green tea would increase, forcing the price to go up.

c)

The quantity supplied of green tea would increase, forcing the price to go down.

d)

The supply of green tea would increase, forcing the price to go down.

e)

The quantity supplied for green tea would go down, forcing the price to go up.

7.

Which of the following is correct regarding supply?

a)

An increase in technology will lead to a decrease in supply causing the supply curve to shift left.

b)

A decrease in the number of sellers in the market will lead to an increase in supply leading to a shift in the supply curve to the right.

c)

A change in price will lead to a change in quantity supplied and a movement along the supply curve.

d)

An increase in price will lead to a decrease in supply causing a shift of the supply curve to the left.

e)

A decrease in the price of a good will lead to an increase in supply causing a shift of the supply curve to the right.

8.

An increase in technology, a decrease in input prices, and an increase in the number of sellers in the marketplace will lead to which of the following?

a)

an increase in the quantity supplied

b)

a decrease in the quantity supplied

c)

an increase in demand

d)

an increase in supply

e)

a decrease in supply

9.

When oil prices fall, what happens to the supply of plastic?

a)

Supply shifts to the left as prices of inputs decreases.

b)

Supply shifts left as more drivers demand gasoline.

c)

Supply shifts as the number of suppliers of plastic declines.

d)

Supply shifts to the right as price of inputs decreases.

e)

Supply shifts as consumers demand more plastic products.

10.

On the way to the supermarket, the tractor trailer carrying peaches tips over and spills peaches all over the highway. The result will be

a)

the quantity supplied of peaches goes down and the price of peaches goes down.

b)

The quantity demanded of peaches goes up and the price of peaches goes down.

c)

The supply of peaches goes down and the price of peaches goes up.

d)

The supply of peaches goes down and the price of peaches goes down.

e)

The demand for peaches goes up and the price of peaches goes up.