Download - Franklin High School

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Economics Quiz
Supply and Demand
Created February, 2012
1. Mr. Kilbourne is shopping for dinner. Although he wants steak for dinner,
he sees that chicken is on sale at $1.00 per pound only today. Tomorrow it
will double in price. He buys chicken. Based on Mr. Kilbourne’s consumer
habits, what can we presume about beef and chicken?
a. they are complementary goods
b. they are substitute goods
c. they are inferior goods
d. they are durable goods
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2. Mr. Carthy hears that Lucinda Williams is playing at the Plaza Theatre.
He is at first overjoyed and then heartbroken to find out that it is sold out
before he ever had a chance to buy a ticket. He finds out that his nemesis,
Mr. McCaig, bought 100 of those tickets, although he has no idea who
Lucinda Williams is. Mr. McCaig is planning on selling those tickets
_________ market price because there is a _______ of them.
a. above; surplus
b. above; shortage
c. below; surplus
d. below; shortage
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3. Ms. DiCara’s car is 10 years old and but it runs fine. However, she wants
one of those new Fiats. She will search the United States coast to coast to
find the best deal. Her demand for a new Fiat is
a. elastic because there are no substitutes.
b. inelastic because of urgency of purchase.
c. inelastic because there are no substitutes.
d. elastic because a new car is expensive.
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4. When Franklin High School first opened, there were no businesses around
it. But over time, small restaurants started to sprout up everywhere. If you
counted the number of eating establishments within ½ mile of the school, you
would find it over 30. The high number of choices the students have would
probably result in what?
a. the price of food at these restaurants would decrease.
b. the price of food at these restaurants would increase.
c. the demand for cafeteria food would increase.
d. the supply of eating establishments would decrease.
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5. If the supply of peaches increased, but the demand for peaches did not
change, the price of peaches would probably ________________________..
a. decrease
b. remain the same
c. increase
d. not enough information to answer the question
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6. A new fertilizer dramatically increases the growth of peach trees and
peaches. If the demand for peaches did not change, what would probably
happen to the price of peaches?
a. decrease
b. increase
c. remain the same
d. not enough information to answer the question
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7. Americans learn that eating peaches improves one’s looks. All other things
being equal, ceteris paribus, what will probably happen to the price of
peaches?
a. increase
b. decrease
c. remain the same
d. not enough information to answer the question
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8. A change in the quantity supplied is a change in the amount offered for
sale in response to
a. greater demand .
b. an increase in productivity.
c. a change in price.
d. new technology.
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9. Which of the following factors might cause an increase in supply?
a. an increase in the cost of inputs
b. a decrease in productivity
c. fewer sellers in the marketplace
d. none of the above
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10. If the price of steel increased, what effect would this have on the
automobile industry?
a. The cost of making automobiles would increase.
b. The supply curve for automobiles would shift to the right, or
increase.
c. The equilibrium price for automobiles would decrease.
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d. all of the above.
11. If the dreaded boll weevil devastated the nation’s cotton crop,
a. the resulting change in demand would lead to a lower equilibrium
price and a higher equilibrium quantity.
b. the resulting change in supply would lead to a higher equilibrium
price and a lower equilibrium quantity.
c. the resulting change in supply would lead to a higher equilibrium
price and a higher equilibrium quantity.
d. the resulting change in demand would lead to a lower equilibrium
price and a lower equilibrium
quantity.
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12. Alligator shoes went on sale and the quantity demand for this stylish
footwear went up. The proprietor, being a shrewd businesswoman, also had
available alligator belts, alligator purses, and alligator vests to go with the
shoes. Although these other items were not priced at sale prices, the demand
for them also increased. This is an example of a
a. demand being influenced by the price of a substitute good
b. demand being influenced by the price of a complementary good
c. demand being influenced by the necessity of the good
d. demand being influenced by the notion that alligator shoes are a
superior good
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13. You get a big pay increase. You trade-in your Honda Civic for a Corvette.
You have, in your own small way
a. decreased the demand for a normal good and increased the demand
for a superior good.
b. decreased the demand for a superior good and increased the demand
for a normal good.
c. decreased the demand for both a normal and superior good.
d. increased the demand for both a normal and superior good.
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14. If two goods are substitutes for each other, an increase in the price of one
will:
a. decrease the demand for the other.
b. increase the demand for the other.
c. decrease the quantity demanded of the other.
d. increase the quantity demanded of the other.
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15. Which of the following could NOT cause an increase in the supply of
cotton?
a. an increase in the price of cotton
b. improvements in the craft of producing cotton
c. a decrease in the price of the machinery employed in cotton
production
d. the government decides to set a minimum price for cotton(price
support)
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16. The law of supply states that, ceteris paribus, as price increases:
a. supply increases
b. quantity supplied increases
c. supply decreases
d. quantity supplied decreases
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17. When the government sets the price of a good and that price is below the
equilibrium price, the result will be:
a. a surplus of the good
b. an increase in the demand for the good
c. a shortage of the good
d. a decrease in the supply of the good
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18. Minimum wage laws are an example of a
a. price ceiling
b. price floor
c. elastic good
d. inelastic good
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19. A decrease in the price of a product would most likely be caused by:
a. an increase in business taxes
b. an increase in consumer incomes
c. a decrease in resource costs for production
d. a decrease in the price of a complementary good
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20. A good is determined to be inelastic if _________________.
a. the price goes up, total receipts go up
b. the price goes up, total receipts go down
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c. the price goes down, total receipts go up
d. the demand for the good is very responsive to a change in price
21. You are at Walgreens and remember that you need a pencil. You see that
they sell pencils for $.35 each. You know that you can get the same pencil for
$.25 at The Office Metropolis, but you buy the pencil for the higher price
anyways. Your demand for this pencil is:
a. Inelastic-urgency of purchase
b. Elastic-cost relative to income
c. Inelastic-cost relative to income
d. Elastic-availability of substitutes
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22. The price of college tuition went up at UTEP by 20%. The resulting
decrease in the number of students enrolling dropped by 25%. Based on this
information, what can be said about the elasticity of tuition at UTEP?
a. It is elastic
b. It is unit elastic
c. It is inelastic
d. Can not make a determination based on the information given
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23. Profit maximization occurs in the production of a good when
a. Total revenue equals total cost
b. Fixed costs equals variable cost
c. Marginal costs equals total revenue
d. Marginal costs equals marginal revenue
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24. When another input is added in the production of a good, such as another
worker; and the total product increases but the marginal product decreases –
the production of that good is at the point of ________ marginal returns
a. increasing
b. diminishing
c. negative
d. zero
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25. Mr. Kapuscik is looking for a full time job as a high school social studies
teacher. The district for which he is looking, however, has decided to cut costs
by increasing class size and having the teachers teach 7 classes instead of 6.
The district has _______ their _________for teachers, although the _______ of
college graduates looking for teaching positions is constant. With this
situation, the price for new teachers could ________.
a. increased; demand; demand; increase
b. decreased; demand; supply; decrease
c. increased; supply; demand; increase
d. decreased; supply; supply; decrease