WorksheetsMicroEcon 1 - Demand and Supply
Total questions: 12
Worksheet time: 6mins
In a market economy, supply and demand are important because they
play a critical role in the allocation of the economy’s scarce resources.
determine how much of each good gets produced.
can be used to predict the impact on the economy of various events and policies.
All of the above are correct.
A competitive market is one in which there
is only one seller, but there are many buyers.
are many sellers, and each seller has the ability to set the price of his product.
are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market.
are so many buyers and so many sellers that each has a negligible impact on the price of the product.
Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?
Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
Some degree of competition is present in most markets.
There are many buyers and many sellers in all types of markets.
Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.
The quantity demanded of a good is the amount that buyers are
willing to purchase.
willing and able to purchase.
willing, able, and need to purchase.
able to purchase.
Which of these statements best represents the law of demand?
When buyers’ tastes for a good increase, they purchase more of the good.
When income levels increase, buyers purchase more of most goods.
When the price of a good decreases, buyers purchase more of the good.
When buyers’ demands for a good increase, the price of the good increases.
At a price of $35, there would be a
a shortage, and the price would tend to rise from $35 to a higher price.
a surplus, and the price would tend to rise from $35 to a higher price.
excess demand, and the price would tend to fall from $35 to a lower price.
excess supply, and the price would tend to fall from $35 to a lower price.
Equilibrium price and quantity are, respectively,
$15 and 200 units.
$25 and 600 units.
$25 and 400 units.
$35 and 200 units.
Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the
demand for bicycle assembly workers will increase.
supply of bicycles will shift to the right.
supply of bicycles will shift to the left.
firm must increase output to maintain profit levels.
If car manufacturers begin using new labor-saving technology on their assembly lines, we would not expect
a smaller quantity of labor to be used.
the supply of cars to increase.
the firms’ costs to fall.
individual car manufacturers to move up and to the right along their individual supply curves.
Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?
What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?
Price will rise.
Price will fall.
Price will stay exactly the same.
The price change will be ambiguous.
Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?
The government would provide tax incentives to encourage people to become farmers.
The government would subsidize the production of food.
The prices of food and the wages of farmers would adjust.
There are no mechanisms to remove the shortage.
