Download Formative Quiz on Supply and Demand 1. The law of demand states

Westinghouse College Prep
Economics
Mr. Johnson
NAME _____________________________
Formative Quiz on Supply and Demand
1. The law of demand states that
A. consumers will buy more of a product as the price increases.
B. consumers will buy more of a product as the price decreases.
C. suppliers will produce more of a product as the price increases.
D. suppliers will produce more of a product as the price decreases.
2. As the quantity of goods consumed increases,
A. the supply curve shifts to the right.
B. the demand curve shifts to the left.
C. consumers’ marginal utility decreases.
D. suppliers’ marginal cost decreases.
Questions 3 - 5 are based on the graph to the left.
3. In the market for peanuts, the original
equilibrium price for a pound of peanuts is
A. $1.50.
B. $2.00.
C. $2.50.
D. $5.00.
4. If the U.S. Department of Agriculture provides
a ​subsidy​ to peanut farmers, the new equilibrium
price for a pound of peanuts will be
A. $1.00.
B. $1.50.
C. $2.00.
D. $4.00.
5. Which of the following statements is true about the impact of a subsidy on the market for peanuts?
A. At any given quantity of peanuts, suppliers now have a higher marginal cost.
B. At any given price of peanuts, consumers are now willing to purchase more.
C. There is a shortage in the market for peanuts.
D. Suppliers now have a lower marginal cost for any given quantity of peanuts produced.
6. According to the law of supply,
A. producers want to sell products at the lowest possible price.
B. consumers want to buy products at the lowest possible price.
C. consumers experience declining marginal utility.
D. producers will want to sell more products as the price increases.
Westinghouse College Prep
Economics
Mr. Johnson
NAME _____________________________
Questions 7 - 8 are based on the graph below.
7. A price of P​1​ will create
A. a surplus
B. a shortage
C. efficiency
D. utility
8. A law that forces suppliers to sell food at a
price below equilibrium will
A. ensure that all people who want to buy
food will be able to do so.
B. create a shortage of food.
C. drive the price down even lower.
D. create a “tragedy of the commons.”
9. In a free market, the most efficient relationship between supply and demand exists at
A. disequilibrium
B. the lowest cost
C. equilibrium
D. the highest quantity.
10. In the market for Cubs’ hats, a change in price will create a
A. movement along an existing supply or demand curve.
B. shift in supply and demand curves.
C. shift in a supply curve.
D. movement along a demand curve but a shift in a supply curve.
11. If consumers will happily buy Pepsi instead of Coke, then these products are
A. inferior goods
B. normal goods
C. complements
D. substitutes
12. If Chance the Rapper’s popularity increases after the release of his new album, one can expect which of
the following changes in the market for tickets to see his concerts?
A. The supply curve will shift to the left.
B. The demand curve will shift to the right.
C. The demand curve will shift to the left.
D. No curves will shift; there will simply be movement along the curves due to price changes.
Westinghouse College Prep
Economics
Mr. Johnson
KEY
1.
2.
3.
4.
5.
6.
B
C
A
A
D
D
7.
8.
9.
10.
11.
12.
A
B
C
A
D
B
NAME _____________________________