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Multiple Choice Quiz
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1
When an economist says that the demand for a product has decreased, this means that:
A)consumers desire to purchase less of this product at each possible price
B)less of the product will be available for purchase at each possible price
C)the price has risen so that consumers are buying a smaller amount of the product
D)the demand curve has shifted to the right
2
Answer the next question on the basis of the following diagram:
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Refer to the diagram. A surplus in this market would result at a price:
A)of $5
B)between $1 and $5
C)above $5
D)at or below $1
3
An increase in consumer incomes will:
A)increase the demand for both normal and inferior goods
B)increase the demand for a normal good but decrease the demand for an inferior good
C)increase the demand for an inferior good but decrease the demand for a normal good
D)decrease the demand for both normal and inferior goods
4
Which of the following best describes an inferior good?
A)A good for which price and quantity demanded are directly related
B)A good for which price and quantity demanded are inversely related
C)A good for which income and quantity demanded are directly related
D)A good for which income and quantity demanded are inversely related
5
If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium:
A)price must rise
B)price must fall
C)quantity must rise
D)quantity must fall
6
Which will not cause supply to increase?
A)An increase in demand
B)A reduction in input prices
C)An improvement in technology
D)A lower price expected in the future
7
The following data show the supply and demand schedule for a competitively produced good.
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Refer to the above data. Suppose government were to fix the price at $14. As a result:
A)there would be a surplus of 65 units
B)there would be a shortage of 65 units
C)demand would increase
D)Supply would increase
8
A change in quantity demanded reflects:
A)a shift in the demand curve to the left
B)a shift in the supply curve to the right
C)a movement along the demand curve as a result of a change in price
D)a shift in the demand curve to the right
9
The Law of Demand states that:
A)an increase in price will cause a proportional change in demand.
B)there is a positive relationship between prices and quantity demanded.
C)consumers demand the production of goods and services in order to fill their wants and needs.
D)there is an inverse or negative relationship between price and quantity demanded.
10
Answer the next question on the basis of the following diagram:
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Refer to the diagram. Suppose there is a preset price in this market of $6. We would expect a:
A)shortage, and the emergence of a secondary market
B)surplus, and the emergence of a secondary market
C)rightward shift of the supply curve
D)leftward shift of the demand curve







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