Multiple Choice P1
What two factors are necessary for demand?
a. The willingness or desire for a good or service and its availability in the market
b. The willingness or desire for a good or service and the ability to pay for it
c. Familiarity with a good or service and the desire to pay for it
d. The availability of a good or service and the ability to pay for it
b. The willingness or desire for a good or service and the ability to pay for it
The U.S. government surveyed oil producers about the level of oil production at different prices. The government wants to put the information in a format that will visually show the overall production pattern. What should it do?
Draw a market supply curve.
On a standard supply and demand graph, what is measured along the horizontal axis?
When there is a shortage, producers raise prices in an attempt to
a. Separate the quantity supplied and demanded
b. Raise the quantity demanded
c. Equalize the quantity supplied and demanded
d. Lower the quantity supplied
c. Equalize the quantity supplied and demanded
According to the law of supply, when prices decrease
a. Quantity supplied decreases
b. Quantity supplied increases
c. Supply decreases
d. Supply increases
a. Quantity supplied decreases
If a shoe manufacturer introduces highly efficient robotic assembly lines, how is the market supply likely to be affected?
A graphical representation of the individual demand schedule. It is the curve for a single customer.
Individual demand curve
If a government set a limit on the price of baseball bats, this type of action would be called
a. Setting an equilibrium price
b. Setting a minimum price
c. Setting a price ceiling
d. Setting a price floor
Setting a price ceiling
What is the primary reason the government might choose to implement a price floor for agricultural products?
To increase the income of the farmers
According to the law of supply, what is the relationship between quantity supplied and price?
a. An inverse relationship
b. A complementary relationship
c. A direct relationship
d. A substitutionary relationship
c. A direct relationship
What is a factor would cause the demand curve for a product to shift outward (increase), rather than causing a movement along the curve?
A widespread increase in consumer pay across the community
A graphical representation of the market supply schedule, the sum of all the individual supply curves.
Market Supply Curve
Why does the government sometimes establish price floors?
a. To decrease the likelihood of rationing
b. To decrease the likelihood of surpluses
c. To increase demand for certain products
d. To increase income for certain producers
d. To increase income for certain producers
The price of food at Chipotle has risen so more consumers are now eating at Qdoba. Which factor is PROBABLY affecting demand?
Substitutes
If the workers of a firm successfully negotiate an increase in wages, which of the following is most likely to happen?
a. The demand curve for the product the firm
produces shifts in (decreases).
b. The demand curve for the product the firm
produces shifts out (increases).
c. The supply curve of the product the firm
produces shifts in (decreases).
d. The supply curve of the product the firm
produces shifts out (increases).
c. The supply curve of the product the firm
produces shifts in (decreases).
The supply curve shifts in (decreases)
Movement of Quantity Demanded (Qd)
A change in price that moves quantity demanded from one point on the demand curve to another point.
A surplus of a particular good is often a signal for a consumer to
a. Expect a lower quality good
b. Expect the prices of that good to rise
c. Seek bargain prices for that good
d. Expect to see the price remain high for that good
c. Seek bargain prices for that good
When the quantity supplied of a product exceeds the quantity demanded, what market condition exists?
Surplus
Which statement shows income as a factor affecting demand?
a. A factory in town gives its employees bonuses,
and mall purchases increase.
b. Many people move into a suburb because it has
affordable housing.
c. Advertising convinces people that jeans make
them look overweight.
d. Meteorologists predict a winter with lots of
snow, so shovel sales rise.
a. A factory in town gives its employees bonuses,
and mall purchases increase.
According to the Law of Supply, what is the typical reaction of producers when the market price of their product decreases?
The quantity supplied decreases
Factors that shift the entire demand curve either outward (to the right) or inward (to the left).
Shift factors
When more buyers enter the market, the equilibrium output will:
a. Fall
b. Fluctuate
c. Rise
d. Stay the same
c. Rise
If a fruit stand realizes they have a surplus of oranges, what signal does this provide to the owner regarding pricing?
Lower the price to attract more buyers