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WorksheetsUnit 2- Supply and Demand
Total questions: 26
Worksheet time: 13mins
The concept of demand refers to:
The total cost of producing a good
The quantity of a good that consumers are willing and able to buy at each price
The maximum price a seller can charge
The profit businesses earn from sales
Which of the following best illustrates the law of demand?
As the price of pizza increases, people buy more pizza
As the price of pizza decreases, people buy more pizza
As the price of pizza decreases, people buy less pizza
As the price of pizza increases, demand shifts right
What does the demand curve show?
How much producers are willing to supply at different prices
How much consumers are willing to buy at different prices
The relationship between supply and equilibrium
The government’s role in pricing
A movement along the demand curve occurs when:
Income increases
Preferences change
The price of the good changes
The supply of the good increases
If the price of a substitute good decreases, the demand curve for the original good will:
Shift left
Shift right
Stay the same
Move along the curve
Supply refers to:
The goods consumers want to buy at each price
The goods producers are willing and able to sell at different prices
The number of firms in a market
The total demand for a product
The law of supply states:
Price and quantity supplied usually move in the same direction
Price and quantity supplied usually move in opposite directions
Price has no effect on supply
Supply only changes when demand changes
The supply curve typically:
Slopes downward
Slopes upward
Is flat
Moves horizontally
What causes a movement along the supply curve?
A change in production technology
A change in the good’s price
A change in consumer income
A change in preferences
An improvement in technology would cause the supply curve to:
Shift left
Shift right
Stay the same
Move upward
Coffee and tea are examples of:
Complements
Substitutes
Fixed costs
Surpluses
If the price of peanut butter rises, the demand for jelly will likely:
Increase
Decrease
Stay the same
Become a surplus
When adding more workers eventually reduces productivity, this illustrates:
Law of diminishing marginal utility
Law of diminishing returns
Law of supply
Law of demand
Which of the following is a fixed cost?
Raw materials
Electricity used for production
Rent for the factory
Wages paid to hourly workers
Which of the following is a variable cost?
Loan payments
Factory rent
Property taxes
Cost of raw materials
Marginal cost measures:
The change in revenue when one more unit is sold
The total cost of production
The change in total cost when output increases by one unit
The average fixed cost per unit
Marginal revenue is:
The total revenue earned by a business
The revenue gained from selling one more unit of output
The cost of producing one more unit
The total profit made after costs
Market equilibrium occurs when:
Demand is greater than supply
Supply is greater than demand
Quantity demanded equals quantity supplied
Price is higher than cost
A surplus occurs when:
Quantity demanded is greater than quantity supplied
Quantity supplied is greater than quantity demanded
Quantity supplied equals quantity demanded
Price is below equilibrium
A shortage occurs when:
Quantity supplied is greater than quantity demanded
Quantity demanded is greater than quantity supplied
Quantity supplied equals quantity demanded
Price is above equilibrium
If consumers suddenly want more of a product at all prices, this is called:
Increase in supply
Increase in demand
Movement along the demand curve
Surplus
If people buy less of a product at all prices, this is called:
Decrease in supply
Increase in supply
Decrease in demand
Shortage
Which of the following causes an increase in supply?
Higher production costs
Lower input costs
Lower productivity
Higher taxes
If the government raises taxes on producers, the supply curve will likely:
Shift right
Shift left
Stay the same
Move along the curve
Which of the following is an example of a price floor?
Rent control
Minimum wage
Price ceiling on gasoline
A sale price set by a store
A price ceiling is best illustrated by:
Minimum wage laws
Rent control laws
Tax increases on businesses
Agricultural subsidies
