Combining Supply And Demand
- 1.When quantity demanded equals quantity supplied
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 2.When quantity supplied is not equal to quantity demanded
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 3.When quantity demanded is more than quantity supplied
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 4.A maximum legal price that can be charged for a good
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 5.A government set price floor on the earnings of workers
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 6.The amount of a product that cannot be sold at a given price
- A.
Price ceiling
- B.
Minimum wage
- C.
Equilibrium
- D.
Price floor
- E.
Shortage
- F.
Rent control
- G.
Surplus
- H.
Disequilibrium
- 7.The sale and purchase of goods done in a way that avoids government controls on price and quantity supplied is called:
- A.
Rationing
- B.
Black market
- C.
Supply shock
- D.
Equilibrium
- 8.Often due to natural disasters, a sudden shortage of a good is called:
- A.
Supply shock
- B.
Surplus
- C.
Equilibrium
- D.
Black market
- 9.In general, what happens to the price of a good or service when a shortage of that good or service occurs?
- A.
It remains unchanged while quantity demanded drops
- B.
It increases until quantity demanded equals quantity supplied
- C.
A price ceiling is set by the government, lowering the price to meet the demand
- D.
It decreases until quantity demanded equals quantity supplied
- 10.What happens when a market is in disequilibrium and prices are flexible?
- A.
Market forces push toward equilibrium
- B.
Sellers wates their resources
- C.
Excess demand is created
- D.
Unsold goods are thrown out
- 11.Why does a government place price ceilings, such as rent control, on some "essential" goods?
- A.
To prevent the development of a black market when the supply of a good increases
- B.
To encourage an increase in supply of necessary items when the price of a good decreases
- C.
As an attempt to make these goods affordable for all consumers by limiting the impact of a shortage on price
- D.
To help reduce the demand of these goods when price increases
- 12.What happens to the price of a good or service when there is excess demand?
- A.
The price stays the same
- B.
The price goes up
- C.
The government sets the price
- D.
The price goes down
- 13.If a baker's supply of bread exceeds the demand for bread, he should:
- A.
Stop selling bread
- B.
Sell only bread
- C.
Lower the price of bread
- D.
Raise the price of bread
- 14.How did an improvement in the technology for producing digital cameras affect the digital camera market?
- A.
The supply curve shifted to the left
- B.
The supply curve shifted to the right
- C.
The demand curve shifted to the right
- D.
The demand curve shifted to the left
- 15.How did the market react to an increased supply of digital cameras?
- A.
Suppliers struggled to keep up with consumer demand for cameras
- B.
Manufacturers produced fewer cameras
- C.
Suppliers increased prices on the cameras
- D.
A surplus of cameras forced suppliers to reduce prices
- 16.What does a company generally do when demand for its goods goes up?
- A.
It rations goods
- B.
It lowers prices
- C.
It raises prices
- D.
There is no set response
- 17.What happens to the equilibrium price when supply goes down?
- A.
The price goes up
- B.
The price goes down
- C.
The price stays the same
- D.
The prices goes up, and then goes down
- 18.During World War II, the United States used rationing to
- A.
Limit production agricultural goods
- B.
Meet shortages of goods that could be used in the war effort
- C.
Give away goods that could not be used in the war effort
- D.
Stop the black market of oil and steel
- 19.How are prices a signal to producers?
- A.
When the price is low it tells producers that too much is being produced
- B.
When the price is low it tells producers that not enough is being produced
- 20.Each of the following will cause the demand for butter to increase EXCEPT
- A.
An increase in the price of margarine
- B.
A scientific study that shows butter is good for people's health
- C.
An increase in the number of people who are unemployed
- D.
An increase in the number of people who might purchase butter
- 21.Each of the following will cause supply to increase except
- A.
Workers are trained to be more efficient
- B.
A new lower cost source of electric power is found
- C.
Firms invest in new technology that reduce their costs of production
- D.
A number of experienced workers retire and are replaced by new workers
- 22.Suppose that the current equilibrium price for natural gas is $1.05 per thousand cubic feet. The government decides to impose a price ceiling of $.90 This will cause:
- A.
The quantity demanded to decrease and the quantity supplied to decrease
- B.
The quantity demanded to decrease and the quantity supplied to increase
- C.
The quantity demanded to increase and the quantity supplied to decrease
- D.
The quantity demanded to increase and the quantity supplied to increase
- 23.An excise tax increases the cost of production for tobacco and results in the supply curve to shift to the left
- A.
True
- B.
False
- 24.Predict how the equilibrium price of coffee would be affected by the following changes: Draw a supply and demand curve and show the work. Poor growing conditions for coffee beans (demand remains constant)
- A.
Supply curve shifts to the right, results in an increase in the equilibrium price
- B.
Supply curve shifts to the left. Results in an increase in the equilibrium price.
- C.
Demand curve shifts to the right. Results in an increase in the equilibrium price.
- D.
Demand curve shifts to the left. Results in an increase in the equilibrium price
- 25.Predict how the equilibrium price of coffee would be affected by the following changes: Draw a supply and demand curve and show the work. A major advertising campaign in the United States claims that coffee increases brain development in teenagers.
- A.
Supply curve shifts to the right, results in an increase in the equilibrium price
- B.
Supply curve shifts to the left. Results in an increase in the equilibrium price.
- C.
Demand curve shifts to the right. Results in an increase in the equilibrium price.
- D.
Demand curve shifts to the left. Results in an increase in the equilibrium price
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