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Multiple Choice Quiz
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1

According to the law of demand:
A)demand is shown on a graph using a demand curve.
B)price and quantity demanded are inversely related.
C)a rise in consumer incomes usually leads to an increase in demand.
D)price and quantity demanded are directly related.
E)a rise in consumer incomes usually leads to a decrease in demand.
2

Identify which of the following will shift the demand curve for new college textbooks to the right.
A)The price of new college textbooks falls.
B)The number of college students declines.
C)The price of used college textbooks decreases
D)The average income of college students rises.
E)The price of new college textbooks rises.
3

Which of the following causes a decrease in the demand for CDs?
A)The price of CD players decreases.
B)The price of cassette tapes rises.
C)CDs are soon expected to decline in price.
D)CDs become more popular with consumers.
E)The price of CDs increases.
4

Identify which of the following will cause a change in the quantity demanded of ice-cream.
A)an increase in the price of ice-cream
B)a fall in the price of other frozen treats
C)a drop in the price of ice-cream cones
D)a summer heatwave
E)an increase in consumer incomes
5

Which of the following statements illustrates the law of supply?
A)A rise in the price of oranges causes a decrease in the quantity supplied of oranges.
B)A drought in orange-growing areas decreases the supply of oranges.
C)The quantity supplied of oranges is reduced by a fall in the price of oranges.
D)When the orange market is in equilibrium, all oranges supplied are bought.
E)When the orange market is not in equilibrium, all oranges supplied are bought.
6

When we draw a supply curve, we assume that:
A)the number of producers in the market is constant.
B)resource prices in the industry are constant.
C)the state of technology is constant.
D)prices of related products are constant.
E)all of the above
7

An increase in supply is shown by:
A)a movement up and to the right along a supply curve.
B)a rightward shift in the supply curve.
C)a movement down and to the left along a supply curve.
D)a leftward shift in the supply curve.
E)a movement up and to the left along a demand curve.
8

Which of the following will cause a decrease in the supply for apples?
A)The price of apples rises.
B)New automated equipment is introduced in fruit farming.
C)Apple- growing areas are affected by an early frost.
D)The wage earned by farm labourers decreases.
E)The price of apples falls.
9

Identify which of the following increases the quantity supplied of milk.
A)a fall in the price of milk
B)a rise in the price of milk
C)a surplus of milk
D)an increase in the number of dairy farmers
E)a decrease in the number of dairy farmers
10

When a perfectly competitive market is in equilibrium:
A)there is no surplus and no shortage.
B)price and quantity remain stable.
C)the demand and supply curves intersect.
D)the plans of buyers and sellers are compatible.
E)all of the above
11

When there is a surplus in the wheat market:
A)there is an excess demand for wheat.
B)the quantity supplied of wheat will rise.
C)the price of wheat will fall.
D)the price of wheat will rise.
E)the quantity demanded of wheat will fall.
12

What will be an effect of a shortage in the market for tomatoes?
A)The price of tomatoes will increase.
B)The demand for tomatoes will decrease.
C)The quantity supplied of tomatoes will fall.
D)The quantity demanded of tomatoes will increase.
E)The price of tomatoes will decrease.
13

How will a decrease in the price of margarine affect the market for butter?
A)Equilibrium price and quantity both increase.
B)Equilibrium price and quantity both decrease.
C)Equilibrium price increases and equilibrium quantity decreases.
D)Equilibrium price decreases and equilibrium quantity increases.
E)Equilibrium price and quantity stay the same.
14

How will a rise in the price of tobacco influence the market for ginseng?
A)Equilibrium price and quantity both increase.
B)Equilibrium price and quantity both decrease.
C)Equilibrium price increases and equilibrium quantity decreases.
D)Equilibrium price decreases and equilibrium quantity increases.
E)Equilibrium price and quantity stay the same.
15

If a consumer is deciding how many CDs and videotapes to purchase, the utility-maximizing rule states that:
A)the consumer's marginal utilities must be the same for both CDs and videotapes.
B)the price of each item divided by the consumer's marginal utility must be the same.
C)the difference between the consumer's marginal utility and the price of each item must be maximized.
D)the consumer's marginal utility per dollar must be the same for both CDs and videotapes.
E)the price of each item divided by the consumer's total utility must be the same.





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