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WorksheetsSupply and Demand Market Equilibrium
Total questions: 35
Worksheet time: 35mins
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.
Mr Nunn goes to the ticket booth to buy tickets for a Hawks game. Mr. Nunn is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available?
The arena forgot to print enough tickets.
The supply of tickets was greater than the demand.
The arena charged too much money for each ticket.
The demand for tickets was greater than the supply.
Which statement expresses a central idea of how the laws of supply and demand work?
The government sets the prices for goods and services.
Prices are determined by the interaction of producers and consumers.
Consumers alone determine the prices for goods and services.
Technology dictates the prices charged for goods and services.
Which of the following would NOT be a determinant of demand?
The price of related goods
Income
Tastes
The prices of the inputs used to produce the good
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.
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?
It would decrease.
It would increase.
It would be unaffected.
There is insufficient information given to answer the question.
A higher price for batteries would tend to
increase the demand for flashlights.
decrease the demand for electricity.
increase the demand for electricity.
increase the demand for batteries.
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.
Use the model to answer the following question. According to the graph, which type of transaction refers to a flow of MONEY through the economy?
Businesses pay for goods purchased in the product markets with money.
Individuals spend money to purchase resources from factor markets.
Money is used to purchase productive resources in the product markets.
Money is used to purchase goods and services in the product markets.
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.
Other things equal, when the price of a good rises, the quantity supplied of the good also rises. What best refers to this situation?
The law of increasing costs.
The law of diminishing returns.
The law of supply.
The law of demand
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 are the equilibrium price and quantity?
$7, 20.
$7, 60.
$5, 40.
$3, 60.
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 Table 4-2. In the table shown, what would be the result if the price were $8?
a surplus of 30 units would exist and price would tend to fall.
a surplus of 60 units would exist and price would tend to rise.
a surplus of 60 units would exist and price would tend to fall.
a shortage of 30 units would exist and price would tend to rise.
James works at an automobile factory. Every day he goes to work and inspects the machines at the factory to make sure they are running smoothly. At the end of the every week, James is paid by his boss, Bill, for his good work. James takes his paycheck to the bank every Friday and deposits most of it, but keeps a little bit of spending money. He then takes his wife, Julie, out for dinner, using the leftover money from his paycheck.
According to the circular flow of economics, which market is James participating in by going out to dinner with his wife, Julie?
Product Market
Stamp Market
Automobile Market
Factor Market
According to the law of demand, when the price of pizza goes up which of the following will occur?
pizza restaurants will stop making pizza
pizza restaurants will make more money
consumers will save more money
consumers will buy less pizza
Marty just finished creating a market demand schedule for his hardware store. Which of the following is he most likely trying to determine?
How many tools are sold to all consumers in the market at various prices.
Which of his competitors is the greatest threat to his business.
Which contractors are the best customers of his products.
How many tools he sold last year to his customers.
Each point along the market demand curve shows which of the following?
how population changes affect the quantity demanded at a specific price
the quantity of the good that consumers would be willing and able to purchase at a specific price
the relationship between the price of the good and total quantity supplied at a series of prices
the quantity of the good that firms would be willing and able to supply at a specific price
A decrease in the price of a particular good, with all other variables constant, causes which of the following to occur?
a movement along a given demand curve to a higher quantity demanded
a movement along a given demand curve to a lower quantity demanded
a shift to a different demand schedule with lower quantities demanded
a shift to a different demand schedule with higher quantities demanded
What happens at the market clearing price?
the supply by sellers meets the demand from buyers
sellers have provided more goods than the demand from buyers
the demand by buyers is rapidly growing.
sellers have provided enough goods for buyers' demand, but at prices that are too high.
On the first day of school, the school store had 100 pencils for sale at $1 each. At the end of the week, there were 90 pencils left. The second week, the price of pencils dropped to $.75 each. At the end of the week, there were 75 pencils left. The store dropped the price $.25 each week, and at the end of the fourth week, there were no pencils left. Which price was the market clearing price?
$.50
$.75
$.25
$1
Which is true if equilibrium is present in a market?
The price of the product will tend to rise.
Quantity supplied exceeds quantity demanded
Quantity demanded equals quantity supplied.
Quantity demanded exceeds quantity supplied.
Use the graph to answer the following question. If the supply curve shifts from S1 to S2 in the above graph, and nothing else changes, what do you expect to happen?
The price will rise.
The price will fall.
The price will remain the same.
The demand will fall
Which factor might cause an increase in the supply of a product?
the introduction of new technology
fewer sellers in the marketplace
a decrease in productivity
an increase in the cost of raw materials
What will happen if the government decided to subsidize the production of bobble-head dolls?
the demand for bobble-heads will decrease.
the supply curve will shift to the right.
the supply curve will shift to the left.
the demand for bobble-heads will equal the supply.
Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market?
The demand curve will shift to the right and the price of cauliflower will rise.
The supply curve will shift to the right and the price of cauliflower will fall.
The demand curve will shift to the left and the price of cauliflower will fall.
The supply curve will shift to the right and the price of cauliflower will rise.
If the price of orange juice rises, the demand for grapefruit juice will do which of the following?
not change unless the price of grapefruit juice also changes
decrease because the two goods are complements
decrease because the two goods are complements
decrease because the two goods are substitutes
A university decides to raise tuition fees to increase the total revenue it receives from students. This strategy will work if the demand for education at that university is which of the following?
Unit Elastic
Inelastic
Elastic
Inversely related to price
Based on the laws of supply and demand, which situation would lead to a shortage?
Businesses are unwilling to reduce the inventory.
The price of a product falls below the equilibrium price.
Consumers are unwilling to pay for the product.
The price of a product rises above the equilibrium price.
