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Econ: Supply, demand, and Price Review

Total questions: 65

Worksheet time: 39mins

Name
Class
Date
1.

Which of the following describes the relative elasticity in demand for toothpaste in a period of economic change?

a)

Demand is inelastic because it is a luxury item.

b)

Demand is elastic because there are no substitutes.

c)

Demand is inelastic because it makes up a large share of most people's budget.

d)

Demand is inelastic because it is a low-cost necessity.

2.

A new variety of apple from imported apple trees has proved popular with American consumers. What challenge does this represent to the apple growers and their desire to take advantage of this development?

a)

Demand for fruits such as apples is inelastic in the short run.

b)

Demand for fruits such as apples is elastic in the short run.

c)

Supply of fruits such as apples is inelastic in the short run.

d)

Supply of fruits such as apples is elastic in the short run.

3.

Which of the following is an example of how a firm can resolve the problem of diminishing marginal returns of labor?

a)

by hiring one additional worker

b)

by hiring several additional workers

c)

by decreasing its marginal returns

d)

by increasing its physical capital

4.

Suppose a new commercial development is built, leading to the opening of several new fast-food restaurants in a market. Which of the following is the likely result of such a development?

a)

The supply curve shifts to the left.

b)

The supply curve shifts to the right.

c)

The price of the good increases.

d)

The supply of the good decreases.

5.

Environmental regulations placed on factories by the government are likely to have this economic effect...

a)

increase supply by increasing efficiency.

b)

decrease supply by increasing transportation cost.

c)

increase supply by increasing subsidy costs.

d)

decrease supply by increasing cost of production.

6.

What would LIKELY happen to the market for citrus fruits as a result of a severe frost in the South?

a)

The market would be thrown into disequilibrium.

b)

Many new sellers would enter the market.

c)

Consumers would demand more of the fruit.

d)

The supply curve would shift to the right.

7.

Which of the following BEST describes equilibrium?

a)

the point at which quantity supplied and demanded should remain no matter what happens in the market

b)

a point on the demand curve that shows the highest market price for a good

c)

a point on the supply curve that shows the greatest possible output

d)

a point that moves continually in response to market changes in quantity supplied and demanded

8.

In a market-based economy, consumers rely on prices to help them

a)

choose among similar products.

b)

decide which products suit their lifestyle.

c)

discover the latest high-technology gadgets.

d)

find clothing that fits them the best.

9.

A huge, weeklong series of outdoor concerts is scheduled for early summer. Why will local stores LIKELY increase their supplies of consumer goods before the concert?

a)

in response to the falling equilibrium price

b)

in response to the expected surplus

c)

in response to the profit incentive

d)

in response to the supply shock

10.

Which statement best describes the law of demand?

a)

As price drops, people want to buy more.

b)

As price drops, people want to buy less.

c)

Price doesn't affect how much people want to buy of a good.

d)

As price increases, people want to buy more.

11.

Which of the following best explains the law of supply?

a)

At low prices, producers want to supply more of their good.

b)

At high prices, producers want to supply less of their good.

c)

At high prices, producers want to supply more of their good.

d)

Producers always want to produce as much as possible, no matter the price.

12.

What does this graphic imply about a market economy?

a)

Supply and demand balance each other out.

b)

Supply is stronger/heavier than demand.

c)

Demand is stronger/heavier than supply.

d)

Supply and demand never interact.

13.

According to the graph, if the price of a good increases too much, what will consumers usually do?

a)

switch to a less expensive alternative

b)

keep buying the good to impress their friends

c)

demand the good in greater amounts, creating a shortage

d)

sue the producer

14.

What happens to quantity supplied of a product as price increases?

a)

increases

b)

decreases

c)

stays the same

15.

What is the marginal product of labor of the third employee?

a)

11 toys

b)

14 toys

c)

3 toys

d)

1 toy

16.

Demand decreased (shifted left). What happened to the equilibrium price?

a)

decreased

b)

increased

c)

stayed the same

d)

we don't have enough information

17.

Demand decreased (shifted left). What happened to the equilibrium quantity?

a)

increased

b)

decreased

c)

stayed the same

d)

we don't have enough information

18.

What is the equilibrium price for a gallon of gas?

a)

$2.20

b)

$1.00

c)

$1.40

d)

$1.80

19.

If the price of a gallon of gas is set at $2, what will happen?

a)

shortage of 250 million gallon

b)

surplus of 250 million gallons

c)

shortage of 100 million gallon

d)

surplus of 100 million gallons

20.

What happens when the price of gas is set at $1/gallon?

a)

shortage

b)

surplus

c)

equilibrium

d)

both consumers and producers are satisfied

21.
In the summer picnic season, a sharp rise in the price of burgers may lead to an increase in demand for
a)
buns.
b)
relish.
c)
chicken.
d)
coleslaw.
22.
Which of these is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home?
a)
The demand curve shifts to the left.
b)
The demand curve becomes flatter.
c)
The demand curve shifts to the right.
d)
The demand curve becomes steeper.
23.
Supply depends on the willingness and ability of
a)
donors to contribute.
b)
producers to produce.
c)
advertisers to promote.
d)
consumers to purchase.
24.
Which of these would most likely increase the supply of soccer balls?
a)
a transportation strike
b)
a government excise tax
c)
a decrease in the price of raw materials
d)
an increase in the supply of tennis balls
25.
The degree to which the quantity demanded responds to changes in price is called
a)
elasticity.
b)
revenue.
c)
schedule.
d)
utility.
26.
Which of these is most likely to quickly become available in larger quantities as a result of a price increase?
a)
airline service
b)
babysitters
c)
medical doctors
d)
midsize cars
27.

A price ceiling example would be Rent Control

a)

True

b)

False

28.

Price that are set below the equilibrium price will likely cause a surpluses.

a)

True

b)

False

29.

if the cost of a raw material goes up, we expect the supply to go up.

a)

True

b)

False

30.

What kind of economic system do we use in the united states?

a)

command

b)

circle flow

c)

market

d)

free

31.
Everything else remaining constant, if there is a surplus in the market for wheat, we would expect the price of wheat to
a)
rise
b)
stay constent
c)
fall
d)
There is not enough info to answer the question
32.
Pig Farmer A believes the price of pork will rise next month. Everything else remaining constant, the supply of pork today will:
a)
remain unchanged - its quantity supplied that changes
b)
increase
c)
decrease
d)
remain unchanged - its demand that changes
33.
When the price of a good changes, 
a)
only quantity demand changes
b)
only quantity supplied changes
c)
both demand & supply changes
d)
both quantity demand & quantity supplied changes
34.
This is the reason we have to make choices.
a)
Scarcity
b)
Shortages
c)
Opportunity Costs
d)
Trade Offs
35.
Jack sees that shoe prices have gone up, being a good econ students, everything else remaining constant, he knows this will cause
a)
Demand to increase
b)
Supply to Increase
c)
Quantity Demanded to  Increase
d)
Quantity Supplied to increase
36.
What is the quantity supplied with a price ceiling of $20?
a)
50
b)
100
c)
150
d)
200
37.

A decrease in the price of a good will

a)

increase supply.

b)

have no impact

c)

increase quantity supplied.

d)

decrease quantity supplied.

38.
Which graph below shows the SUPPLY CURVE?
a)
A
b)
B
c)
C
d)
D
39.
How many cup holders are producers willing to supply at a price of $2.50?
a)
3,000
b)
4,000
c)
5,000
d)
7,000
40.
A sharp rise in the price of Doritos may lead to an increase in the demand for
a)
salsa
b)
hamburgers
c)
Cheetos
d)
napkins
41.
Which of these best describes market equilibrium? 
a)
the price of Pepsi does not vary much from week to week 
b)
Pepsi production provides a good profit for the manufacturer
c)
everyone who wants Pepsi can easily afford to buy it 
d)
the amount of Pepsi for sale matches the amount that people want to buy
42.
Where supply and demand intersect
a)
equilibrium 
b)
elasticity
c)
demand curve
d)
supply curve
43.

Which statement expresses a central idea of how the laws of supply and demand work?

a)

The government sets the prices for goods and services.

b)

Prices are determined by the interaction of producers and consumers.

c)

Consumers alone determine the prices for goods and services.

d)

Technology dictates the prices charged for goods and services.

44.
When companies compete in a market economy, what is usually the result?
a)
Consumers are able to buy goods for the best available price.
b)
People pay much higher prices for goods.
c)
There are frequent shortages of goods on the market.
d)
Producers refuse to sell some of their products.
45.
In general, if the price of a good or service goes down, what happens to the demand for that good or service?
a)
demand goes up
b)
demand stays the same
c)
demand goes down
d)
none of the above
46.
Amazon Prime is selling Smencils.  There are only a few packs left and they are very popular.  What will happen to the price?
a)
The price will go up.
b)
The price will go down.
47.
What a business has left after all the bills have been paid?
a)
supplies
b)
taxes
c)
profit
d)
debt
48.
Physical items that you can touch and see are called:
a)
Goods
b)
Needs
c)
Services
d)
Wants
49.
a person or company that makes, grows, or supplies goods to sell is called the?
a)
damand
b)
price
c)
producer
d)
shortage
50.
The desire or willingness a consumer has to purchase a good or a service is called?
a)
shortage
b)
supply
c)
price
d)
demand
51.
When the demand for a product or service is higher than the supply this causes what?
a)
shortage
b)
consumer
c)
surplus
d)
equilibrium
52.
What does this curve represent?
a)
demand
b)
supply
c)
equilibrium
d)
shortage
53.
Farmers in California have had wonderful weather. They have produced the largest crop of watermelons in years. What will happen to the price of watermelons?
a)
The price will go up.
b)
The price will go down.
54.
What does this curve represent?
a)
supply
b)
equilibrium
c)
demand
d)
surplus
55.
The week before Halloween, pumpkin patches all around the country sell lots of pumpkins. What will happen to the price of pumpkins on the day after Halloween?
a)
The price will go up.
b)
The price will go down.
56.

Which would an economist consider a likely substitute for coffee?

a)

Tea

b)

Donuts

c)

Water

d)

Chicken

57.
Supply depends on the willingness and ability of 
a)
donors to contribute
b)
advertisers to promote
c)
producers to sell
d)
consumers to purchase
58.
Which of these would most likely increase the supply of Pizza Hut pizza? 
a)
a delivery trucker strike (who bring ingredients)
b)
a government excise tax
c)
a decrease in the price of cheese
d)
an increase in the supply of Runza hamburgers
59.
What happens when a company purposely prices their products very low, in an attempt to get people to try them? 
a)
equilibrium
b)
price floor
c)
surplus
d)
shortage
60.
What event in the midwest would shift the supply curve for corn to the left? 
a)
an influx of new low-wage workers
b)
a thunderstorm with large hail
c)
evidence that corn improves athletic ability
d)
a study stating that corn causes heart disease
61.
When might it be time to produce less of a product? 
a)
when the cost of materials is cheaper
b)
when you can hire more skilled workers
c)
when a new company just like yours opens
d)
when consumers are only willing to pay a low price for your product
62.
What is the result of the government setting a price ceiling on apartments for rent? 
a)
apartments are available but too expensive
b)
people start dividing their homes in to apartments to rent
c)
people want to rent but struggle to find apartments
d)
construction jobs increase as more people build new apartments
63.
How many animals are demanded at $5?
a)
0
b)
20
c)
60
d)
90
64.
Price ceilings create a(n)... 
a)
shortage
b)
surplus
c)
equilibrium
d)
shift in the supply curve
65.
A new company in town creating the same product as you would cause...
a)
the demand to shift to the right
b)
the demand to shift to the left
c)
the supply to shift to the right
d)
the supply to shift to the left

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