Unit 2: Demand and Supply Analysis - Practice Quiz

1 Which of the following is the most important determinant of the quantity demanded of a good?

2 The law of demand states that, other things being equal, as the price of a good rises, its quantity demanded:

3 An increase in consumer income will typically increase the demand for a:

4 Two goods are called substitutes when a rise in the price of one leads to:

5 Which factor is a determinant of supply rather than demand?

6 The law of supply states that, other things being equal, as the price of a good rises, its quantity supplied:

7 An improvement in technology used to produce a good will most likely:

8 For complementary goods such as cars and petrol, a rise in the price of cars will:

9 A rise in the number of firms in a market will normally cause the market supply to:

10 Which of the following would shift the demand curve for a good to the right?

11 Individual demand refers to the quantity of a good demanded by:

12 Market demand is obtained by:

13 If at a price of $10 consumer A demands 4 units and consumer B demands 6 units, the market demand at $10 is:

14 Market supply is derived by:

15 The typical individual demand curve slopes:

16 The individual supply curve normally slopes:

17 Market equilibrium occurs at the price where:

18 When the market price is above the equilibrium price, the market experiences a:

19 When the market price is below the equilibrium price, there will be a:

20 The equilibrium price is also known as the:

21 The price of coffee rises sharply. As a result, the demand curve for tea shifts to the right. This indicates that coffee and tea are:

22 A consumer's income falls, and the demand for packaged noodles increases. Packaged noodles are best classified as a(n):

23 Which of the following would cause the supply curve of wheat to shift to the left?

24 Consumers expect the price of petrol to rise sharply next week. The most likely immediate effect on the current demand for petrol is:

25 A change in the good's own price causes:

26 Cars and petrol are complementary goods. If the price of cars falls significantly, the demand for petrol will most likely:

27 The market demand curve is obtained by:

28 In a market, buyer A demands and buyer B demands . At price , the market quantity demanded is:

29 Two firms supply a good with and . At price , the market quantity supplied is:

30 Compared to an individual demand curve, the market demand curve is generally:

31 If new buyers enter a market while individual demand curves remain unchanged, the market demand curve will:

32 Which statement about individual and market supply is correct?

33 Market demand is and market supply is . The equilibrium price is:

34 Using and , the equilibrium quantity is:

35 At a price above the equilibrium price, a competitive market will typically experience:

36 A government sets a price ceiling below the equilibrium price. The most likely result is:

37 If both demand and supply increase (shift right) simultaneously, the equilibrium quantity will:

38 Demand increases while supply stays constant. The new market equilibrium shows:

39 In a market, and . At a price of , the market has a:

40 A leftward shift in supply with demand held constant will cause the equilibrium to move to a:

41 The market demand and supply for a good are and . If the government imposes a price floor of , what is the resulting surplus in the market?

42 Demand is and supply is . A per-unit tax of is levied on producers. What is the new price paid by consumers?

43 A market has two consumers. Consumer 1's demand is and Consumer 2's demand is . What is the market demand function for ?

44 Using the two consumers from the previous setup (, ), what is the correct market demand for the price range ?

45 Two goods X and Y have cross-price elasticity of demand equal to , while good X has income elasticity of . Which classification of good X is consistent with both figures?

46 Initially the market clears at , . Demand then rises by at every price while supply falls by at every price. Assuming linear curves with demand slope and supply slope (in per unit ), the direction of change in equilibrium quantity is:

47 Demand is and supply is . If a binding price ceiling causes a shortage of exactly units, at what price is the ceiling set?

48 The price elasticity of supply for a firm is estimated at in the short run. Which statement best explains why long-run supply elasticity typically exceeds this value?

49 Demand: . Supply: . What is the total surplus (consumer plus producer surplus) at competitive equilibrium?

50 In a market with identical firms, each firm's supply is (for ). If the market supply is , how many firms are in the market?

51 A good has income elasticity and own-price elasticity . During a recession, real incomes fall and the good's price falls . Approximately what is the net percentage change in quantity demanded?

52 Demand is and supply is . The government sets a per-unit subsidy of paid to producers. By how much does equilibrium quantity change?

53 For a Giffen good, which combination of properties must simultaneously hold?

54 Demand is and supply is . A per-unit tax of is imposed. What share of the tax burden falls on consumers?

55 Market demand intersects a perfectly inelastic (vertical) supply of . The government mandates that supply rise to . What happens to equilibrium price?

56 A firm expects the price of its output to rise sharply next quarter. Holding all else constant, the most likely immediate effect on the current-period supply curve is:

57 In a market, and . If both the demand and supply curves shift so that the new equilibrium price is unchanged but equilibrium quantity rises by units, which shift pattern is consistent?

58 The market demand is . Suppose new identical buyers each with demand enter the market. What is the new market demand?

59 A market's demand elasticity is and supply elasticity is . A supply-side shock reduces supply. Compared with a market where demand elasticity is , the price increase from the same shock will be:

60 Demand and supply define a market. A price ceiling of is imposed. What is the deadweight loss relative to the competitive equilibrium?