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WorksheetsEconomics - Demand, Supply, & Market Equilibrium
Total questions: 56
Worksheet time: 36mins
Thousands of people leave a small town due to a factory closing down. Sales at the local grocery store are reduced. What causes this change?
Prices or availability of substitutes
Prices or availability of complementary goods
Change in the weather or season
Change in the number of buyers
New technology advances the rate at which furniture can be assembled. Why does this change the supply?
There is a change in cost of production.
The number of producers changes.
The expectations of consumers changes.
The output rate declines.
Which of the following best refers to the market equilibrium price?
Surpluses depress the number of goods supplied.
Shortages and surpluses will have no effect on the market.
The government will not intervene in the market.
The quantity demanded is the same as the quantity supplied.
If the price of a substitute to good X increases, then
The demand for good X will increase.
The market price of good X will decrease.
The demand for good X will decrease.
The demand for good X will not change.
What will happen in the rice market if buyers are expecting higher prices in the near future?
The demand for rice will increase.
The demand for rice will decrease.
The demand for rice will be unaffected.
The supply of rice will increase.
Refer to Graph 4-1. The movement from point A to point B on the graph shows
a decrease in demand.
an increase in demand.
an increase in quantity demanded.
a decrease in quantity demanded.
What does the Latin phrase Ceteris paribus literally mean?
"other things being equal."
"after this therefore because of this."
"to respond slowly to a change in price."
"There's no such thing as a free lunch."
What best refers to the situation when the price of a good or service changes?
there is a movement along a stable demand curve.
demand shifts in the opposite direction.
demand shifts in the same direction.
supply shifts in the opposite direction.
Refer to Graph 4-4. On the graph, what could most likely cause the movement from S to S1?
A decrease in the price of the good.
An increase in income.
An improvement in technology.
An increase in input prices.
Refer to Graph 4-5. According to the graph, What occurs at a price of $7?
there would be a shortage of 40 units.
there would be a surplus of 40 units.
there would be a surplus of 20 units.
the market would be in equilibrium.
Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?
$7, 20.
$7, 60.
$5, 40.
$3, 60.
The law of demand argues that as prices rise
the quantity demanded will fall
the quantity demanded will rise
the demand curve will shift to the right
quantity demanded will fall due to a decrease in demand
When quantity supplied is smaller than quantity demanded, you have a ____________.
shortage
surplus
deficit
equilibrium
Point at which supply and demand curve intersect each other
price ceiling
excess demand
equilibrium
disequilibrium
A situation in which the quantity supplied is greater than the quantity demanded is
a shortage
a surplus
a price floor
a price ceiling
In economic terms, the marketplace
exists only at the local level.
is a place where people buy food.
exists only at the national level.
operates through voluntary exchange.
According to the substitution effect, if two items satisfy the same need and the price of one rises,
people will buy more of the higher-priced item.
people will buy more of the lower-priced item.
the demand will go up.
people will buy something else.
How does an increase in consumer population affect the demand for most products?
demand decreases
prices go down
demand increases
prices go up
A shift to the left in the demand curve indicates a(n)
decrease in price.
decrease in demand.
increase in population.
increase in demand.
When a product becomes a fad, the demand curve for that product
slopes upward.
becomes a straight line.
shifts to the right.
shifts to the left.
Which of the following goods has inelastic demand?
sugar
a particular brand of coffee
Diet Coke
a t-bone steak
If two products are complementary goods, how will a decrease in the price of one affect the other?
demand will increase
price will increase
demand will decrease
price will decrease
Prices on goods and services are determined
only by demand.
only by supply.
by both demand and supply.
neither by demand nor supply.
The use of technology to produce and distribute goods will
not affect supply.
increase supply.
decrease supply.
move the supply curve to the left.
When quantity supplied increases due to improved technology
manufacturers will stop making the product.
prices will increase.
consumers will stop buying the product.
prices will decrease.
A decrease in the demand for a good together with an increase in supply would cause
a shortage of the good.
a surplus of the good.
an increase in production.
the equilibrium price to be reached.
When a market economy operates without restriction, it
creates shortages.
creates surpluses.
raises prices.
eliminates shortages and surpluses.
A government-set maximum price that can be charged for a good or service is a(n)
price ceiling.
price floor.
subsidy.
tax.
A barrier to entry is
An obstacle that makes it difficult for new firms to enter a market.
A commitment on the part of big business to allow smaller companies to compete.
An obstacle that prevents additional workers from entering an industry, such as a union.
If the entire output of a market is produced by a SINGLE seller, the firm:
Is a monopoly.
Is producing a new product.
If there are many firms in an industry producing goods that are similar but slightly different, this is an example of
Monopoly
Monopolistic competition.
Product differentiation refers to
Features that make one product appear different from competing products in the same market.
The selling of identical products in different markets.
Which of the following usually results from colluding firms?
Less is produced
Profit decreases
Prices are higher
Going to the Dallas Farmers Market to buy apples, you will find this type of market structure.
Monopoly
Perfect Competition
Monopolistic Competition
Oligopoly
