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Supply and Demand Quiz:
1. For most products and services, increased price results in
a. demand for fewer products. b. demand for more products.
c. reduced demand for substitutes. d. increased demand for complements.
2. An increase in the price of milk causes a decrease in the demand for cereal. The two products are
a. substitutes. b. complements. c. unrelated. d. demand elastic.
3. Because a modest price increase has little or no effect, the demand for the product is
a. complementary. b. inelastic. c. elastic. d. unit elastic.
4. Consumers’ willingness to replace a costly item with a less costly item is an example of
a. the substitution effect. b. the income effect.
c. demand elasticity. d. complements.
5. An increase in the price of cameras results in a decrease in the demand for film. The two products are
a. substitutes. b. demand elastic. c. unrelated. d. complements.
6. When a customer’s need for a product is not urgent, demand tends to be
a. inelastic. b. elastic. c. complementary. d. unit elastic.
7. The Law of Demand states that
a. more will be purchased at low prices than at high ones.
b. less will be purchased at low prices than at high ones.
c. approximately the same amount will be purchased at low prices than at higher prices.
d. all people have the ability, desire, and willingness to buy.
8. The Law of Supply states that
a. the quantity supplied varies inversely with its price.
b. the quantity supplied varies irregularly with its price.
c. the quantity demanded varies inversely with
d. the quantity supplied varies directly with its price.
9. All of the following can cause an increase in supply EXCEPT
a. a decrease in the cost of inputs. b. fewer sellers in the marketplace.
c. an increase in productivity. d. a change in taxes or subsidies.
10. Which product is likely to have the most elastic supply curve?
a. ice cream cones b. automobiles
c. ships d. dishwashing machines
11. The supply curve is
a. downward sloping. b. level.
c. upward sloping. d. irregular.
12. The demand curve is always
a. upward sloping. b. downward sloping. c. level. d. irregular.
13. Buying only one instead of two sodas at lunch time describes what concept?
a. demand b. consumerism
c. marginal utility d. diminishing marginal utility
14. How does the demand curve respond to an increase in demand?
a. The curve shifts left. b. The curve shifts right.
c. There is movement along the curve. d. There is no change in the curve.
15. All of the following are examples of complements EXCEPT
a. butter and margarine. b. flashlights and batteries.
c. peanut butter and jelly. d. cameras and film.
16. All of the following products have relatively inelastic demand EXCEPT
a. a physician’s services. b. tobacco products. c. stereo equipment. d. prescription drugs.