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Demand and Supply Summative

Total questions: 75

Worksheet time: 38mins

Name
Class
Date
1.
If the price of potato chips increases, other things being equal, demand for potato-chip dip will:
a)
not change, only the quantity demanded will change.
b)
increase, because the goods are substitutes.
c)
decrease, because the goods are substitutes.
d)
decrease, because the goods are complements.
2.
Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:
a)
cause an upward movement along the demand curve for computers.
b)
cause a downward movement along the demand curve for computers.
c)
shift the demand curve for computers to the left.
d)
shift the demand curve for computers to the right.
3.
Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:
a)
a downward movement along the demand curve for bus travel.
b)
no change in the demand curve for bus travel.
c)
an upward movement along the demand curve for air travel.
d)
a rightward shift in the demand curve for bus travel.
4.
If the price of hot dogs increases, what will happen in the market for potato chips, a complementary good?
a)
Demand will increase.
b)
Quantity demanded will increase.
c)
Demand will decrease.
d)
Quantity demanded will decrease.
5.
Supply is a relationship between:
a)
price of a particular good and quantity of this good that buyers are willing to buy.
b)
cost of a particular good and quantity of this good that sellers are willing to buy.
c)
price of a particular good and quantity of this good that sellers are willing to sell.
d)
cost of a particular good and price that buyers are willing to pay.
6.
Consider the following statement: ‘Due to the drought the quantity of water available for consumption reduced dramatically’. This will cause a/an:
a)
downward movement along the supply curve for water.
b)
upward movement along the supply curve for water.
c)
rightward shift in the supply curve for water.
d)
leftward shift in the supply curve for water.
7.
When the price of a good is above its equilibrium price, a:
a)
surplus puts upward pressure on the price.
b)
surplus puts downward pressure on the price.
c)
shortage puts upward pressure on the price.
d)
shortage puts downward pressure on the price.
8.
A shortage of a product means a/an:
a)
excess supply of the product.
b)
excess demand of the product.
c)
situation where the quantity demanded is less than the quantity supplied.
d)
situation where the quantity supplied exceeds the quantity demanded.
9.

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?

a)

Prices or availability of substitutes

b)

Prices or availability of complementary goods

c)

Change in the weather or season

d)

Change in the number of buyers

10.

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.

11.

Which of the following would NOT be a determinant of demand?

a)

The price of related goods

b)

Income

c)

Tastes

d)

The prices of the inputs used to produce the good

12.

Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

a)

It would decrease.

b)

It would increase.

c)

It would be unaffected.

d)

There is insufficient information given to answer the question.

13.

What will happen in the rice market if buyers are expecting higher prices in the near future?

a)

The demand for rice will increase.

b)

The demand for rice will decrease.

c)

The demand for rice will be unaffected.

d)

The supply of rice will increase.

14.

Refer to Graph 4-1. The movement from point A to point B on the graph shows

a)

a decrease in demand.

b)

an increase in demand.

c)

an increase in quantity demanded.

d)

a decrease in quantity demanded.

15.

What does the Latin phrase Ceteris paribus literally mean?

a)

"other things being equal."

b)

"after this therefore because of this."

c)

"to respond slowly to a change in price."

d)

"There's no such thing as a free lunch."

16.

Refer to Graph 4-4. On the graph, what could most likely cause the movement from S to S1?

a)

A decrease in the price of the good.

b)

An increase in income.

c)

An improvement in technology.

d)

An increase in input prices.

17.

Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?

a)

$7, 20.

b)

$7, 60.

c)

$5, 40.

d)

$3, 60.

18.

Refer to Graph 4-5. According to the graph, What occurs at a price of $7?

a)

there would be a shortage of 40 units.

b)

there would be a surplus of 40 units.

c)

there would be a surplus of 20 units.

d)

the market would be in equilibrium.

19.

Refer to Table 4-2. In the table shown, what would be the result if the price were $8?

a)

a surplus of 30 units would exist and price would tend to fall.

b)

a surplus of 60 units would exist and price would tend to rise.

c)

a surplus of 60 units would exist and price would tend to fall.

d)

a shortage of 30 units would exist and price would tend to rise.

20.

This part of the market determines DEMAND

a)

buyers

b)

sellers

c)

suppliers

d)

store owners

21.

This part of the market determines SUPPLY

a)

buyers

b)

sellers

c)

consumers

d)

us

22.

For the law of demand, as price rises, what happens to quantity demanded?

a)

it goes up

b)

it goes down

c)

it stays the same

d)

it is not effected

23.

For the law of supply, as price rises, what happens to quantity supplied?

a)

it goes up

b)

it goes down

c)

it stays the same

d)

it is not effected

24.

When quantity supplied and quantity demanded is equal

a)

surplus

b)

shortage

c)

equilibrium

d)

law of demand

25.

If a price is below the equilibrium price it creates a...

a)

shortage

b)

surplus

c)

market price

d)

supply

26.

What does this curve represent?

a)

demand

b)

supply

c)

equilibrium

d)

shortage

27.

What does this curve represent?

a)

supply

b)

equilibrium

c)

demand

d)

surplus

28.

A place where buyers and sellers of a particular good or service interact

a)

Supply

b)

Demand

c)

Agency

d)

Market

29.
Mr Tonkli goes to the ticket booth to buy tickets for a Cavs game. Mr. Tonkli is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available? 
a)
The arena forgot to print enough tickets.
b)
The supply of tickets was greater than the demand.
c)
The arena charged too much money for each ticket.
d)
The demand for tickets was greater than the supply.
30.
The price at which the quantity demanded by consumers equals the quantity suppled by the producers is know as what?
a)
Competition
b)
The Law of Supply
c)
The Law of Demand
d)
The Equilibrium Price
31.
Legal maximum that can be charged for a good.
a)
price ceiling
b)
excess demand
c)
equilibrium
d)
disequilibrium
32.
When the government sets a price floor on earned income, it is called which of the following?
a)
market equilibrium rate
b)
base-level wage
c)
minimum wage
d)
employment guarantee
33.
Why does the government place price ceilings on some "essential" goods?
a)
to prevent inflation during to reduce supply for these goods
b)
to keep business people from making large profits
c)
to keep the goods from becoming too expensive
d)
to reduce demand for these goods
34.
Which of the following is another name for excess demand?
a)
shortage
b)
surplus
c)
equilibrium
d)
disequilibrium
35.
Which of the following is another name for excess supply?
a)
shortage
b)
surplus
c)
equilibrium
d)
disequilibrium
36.
Demand is the desire and the __________ to buy a product or service
a)
need
b)
time
c)
plan
d)
ability
37.
Printers and ink cartridges are typically purchased together.  Economists would call these
a)
Stubstitues
b)
Complements
c)
Elastic
d)
Inelastic
38.

According to the law of supply, what happens as price increases?

a)

The quantity supplied increases

b)

The quantity supplied decreases

c)

The supply curve shifts to the left

d)

The supply curve shifts to the right

39.

Which of these are determinants of demand?

a)

Income

b)

Tastes and preferences

c)

Price of other goods

d)

All of these

e)

None of these

40.
Millions of people see a famous sports star drinking apple juice on television. The fans think apple juice helps make the athlete strong. What will happen to the price of apple juice?
a)
The price will go up.
b)
The price will go down.
41.
A price floor
a)
Sets the minimum price
b)
Sets the maximum price
c)
Sets the median price
d)
Sets the recommended price
42.
A price ceiling
a)
Sets the minimum price
b)
Sets the maximum price
c)
Sets the median price
d)
Sets the recommended price
43.
At a price of $299.95, the manufacturer of a portable gas-powered generator is willing to supply 19,000 units per quarter. At a price of $349.95, it is likely that the manufacturer will be willing to supply
a)
more than 19,000 units per quarter.
b)
19,000 units per quarter.
c)
less than 19,000 units per quarter.
d)
It is impossible to predict the effect of a higher price on the number of units of a product that a firm will be willing to produce.
44.
At a price of $299.95, the demand for portable gas-powered generator is 19,000 units. At a price of $349.95, it is likely demand will be
a)
more than 19,000 units per quarter.
b)
19,000 units per quarter.
c)
less than 19,000 units per quarter.
d)
It is impossible to predict the effect of a higher price on the number of units of a product that a firm will be willing to produce.
45.
In the figure above, which movement reflects how an increase in the price of fruit roll ups will affect demand for fruit snacks?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
46.
In the figure above, which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
47.
In the figure above, which movement reflects an decrease in income if fruit snacks are an inferior good?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
48.

In the figure above, which movement reflects an decrease in the price of fruit snacks?

a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
49.
In the figure above, an increase in the supply of oil would result in a movement from
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
50.
In the figure above, an increase in the quantity of oil supplied but NOT in the supply of oil is shown by a movement from
a)

from point a to point b

b)

from point a to point c

c)

from point a to point d 

d)

from point a to point e

51.
In the figure above, which movement could be caused by an increase in the wages of oil workers?
a)

from point a to point b

b)

from point a to point c

c)

from point a to point d 

d)

from point a to point e

52.
In the figure above, which movement could be caused by the development of a new, more efficient refining technology?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
53.
What would occur if taxes were raised on oil?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d
d)
from point a to point e
54.
If the price of oil is expected to drop in 2 months, what will happen in the present?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
55.
If the number of oil workers is in short supply, what will likely happen to the supply of oil?
a)
from point a to point b
b)
from point a to point c
c)
from point a to point d 
d)
from point a to point e
56.
The figure above represents the market for phones. A study comes out stating that too much screen time on phones leads to a 10 point IQ drop.
a)
demand curve will not shift, and the supply curve shifts from S1 to S2. 
b)
demand curve will not shift, and the supply curve shifts from S2 to S1.
c)
demand curve shifts from D1 to D2 and the supply curve will not shift. 
d)
demand curve shifts from D2 to D1 and the supply curve will not shift.
57.
The above figure represents the market for oil. Because of the development of a new deep sea drilling technology the
a)
demand curve will not shift, and the supply curve shifts from S1 to S2. 
b)
demand curve will not shift, and the supply curve shifts from S2 to S1.
c)
demand curve shifts from D1 to D2 and the supply curve will not shift. 
d)
demand curve shifts from D2 to D1 and the supply curve will not shift.
58.
The above figure represents the market for mechanical pencils. What happens when the cost of lead increases to consumers?
a)
demand curve will not shift, and the supply curve shifts from S1 to S2. 
b)
demand curve will not shift, and the supply curve shifts from S2 to S1.
c)
demand curve shifts from D1 to D2 and the supply curve will not shift. 
d)
demand curve shifts from D2 to D1 and the supply curve will not shift.
59.
The above figure represents the market for bicycles. If bicycle makers are given reduced subsidies, what will occur?
a)
demand curve will not shift, and the supply curve shifts from S1 to S2. 
b)
demand curve will not shift, and the supply curve shifts from S2 to S1.
c)
demand curve shifts from D1 to D2 and the supply curve will not shift. 
d)
demand curve shifts from D2 to D1 and the supply curve will not shift.
60.

The above figure represents the market for bicycles. When the song "On A Bicycle Built For Two" by Nat King Cole came out, what happened?

a)

demand curve will not shift, and the supply curve shifts from S1 to S2. 

b)

demand curve will not shift, and the supply curve shifts from S2 to S1.

c)

demand curve shifts from D1 to D2 and the supply curve will not shift. 

d)

demand curve shifts from D2 to D1 and the supply curve will not shift.

61.

Take a look at the graph below. Label the curves by filling in the blanks. The supply curve is __________________ and the demand curve is _________________.

a)

red ..... blue

b)

blue .... red

62.

Which scenario below could cause a change in the quantity supplied to go from point C to point D on the supply curve?

a)

The demand decreased

b)

The price decreased

c)

The price increased

63.

The law of demand says that as prices go ________________, consumers buy _______________ of that product.

a)

down .... less

b)

down .... more

64.

Which of the scenarios below could cause a change in the quantity demanded for gas, to go from point A to point B?

a)

The price of gas increased

b)

The price of gas decreased

65.

If current production is shown by the green (x) on the supply curve, is there a shortage or a surplus?

a)

shortage

b)

surplus

66.
Which of the following is NOT one of the determinants of supply?
a)
Change in cost of resources/inputs
b)
Change in number of sellers
c)
Substitutes
d)
Change in technology
67.

Identify the correct determinant of supply:

Example: If the cost of electricity used to power an automotive factories falls, the supply of cars in the market increases

a)

Cost of resources

b)

Number of sellers

c)

Change in expectations

d)

Change in technology

68.
Identify the correct determinant of supply.
Example: If the government requires factories to reduce pollution, complying will initially increase costs of production in the market and reduce supply.
a)
Government regulation
b)
Cost of resources
c)
Change in education 
d)
Change in technology
69.
Identify the correct determinant of supply.
Example: As the demand for DVDs decreased due to consumer preference for streaming movies, the market price for DVDs fell. This lower market price caused sellers to leave the DVD market and supply decreased. 
a)
Government regulation
b)
Change in number of sellers
c)
Change in income
d)
Change in expectations
70.
Identify the correct determinant of supply.
Example: If airlines expect prices for airline tickets to fall in September when families are less likely to travel due the school calendar, they will supply more during the summer months when they can charge higher fares.
a)
Change in income
b)
Change in number of sellers
c)
Expectations
d)
Change in technology
71.
Identify the correct determinant of supply.
Examples: When auto manufacturer were able to implement robotics on the production line, automobiles were produced more quickly and at a smaller cost per unit. This allowed the industry to supply more cars.
a)
Government regulations
b)
Expectations
c)
Number of sellers
d)
Change in technology
72.
Identify the correct determinant of supply.
Example: An economic boom allows skilled workers to move from fast food jobs into white collar office administration jobs. Fast food producers are forced to hire less skilled workers and supply of fast food decreases. 
a)
Change in education
b)
Government regulation
c)
Number of sellers
d)
Expectations
73.
Labor costs are rising through the roof! Minimum wages are now at $25 an hour. This means even the basic item will need to cost more to keep up with rising costs. What determinant of supply does this most relate to?
a)
Change in Technology
b)
Change in Number of Sellers in the Market
c)
Change in Cost of Factors of Production
74.
A brand new machine cooks, cleans, and never messes up a fast food order. This means we can sell more fast food than ever before, leading to producers cutting cost of fast food. Which supply factor does this most likely relate to?
a)
Change in Technology
b)
Change in Profit Opportunities Producing other Products
c)
Change in Producers' Price Expectations
75.
The sellers of Twinkies also sell healthy foods. With all the health regulations we have now, the sellers of Twinkies want to sell more healthy foods. The supply of Twinkies will decrease. What supply factor does this best relate to?
a)
Change in Technology
b)
Change in Number of Sellers in the Market
c)
Change in Profit Opportunities Producing other Products

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