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Multiple Choice Quiz
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1
Demand is:
A)the quantity of a good or service that buyers wish to purchase at any particular price.
B)the quantity of a good or service that buyers wish to purchase at each conceivable price.
C)the amount that consumers are willing to spend to purchase a good or service.
D)the quantity of a good or service sold when the market is in equilibrium.
2
Supply is:
A)the amount that it costs a firm to produce its output.
B)the quantity of a good or service that firms wish to sell at any particular price.
C)the quantity of a good or service that firms wish to sell at each conceivable price.
D)the quantity of a good or service sold when the market is in equilibrium.
3
An excess supply:
A)occurs when firms devote too many resources to the production of a good.
B)occurs when consumers don’t like a firm’s product.
C)occurs when the price is below the equilibrium price.
D)occurs when the price is above the equilibrium price.
4
At the equilibrium price:
A)the quantity sold is equal to the amount produced.
B)every person that is willing to pay that price can purchase the good.
C)there is no pressure to change the price.
D)all of the above.
5
An excess demand:
A)means that there is a shortage of the product in the market.
B)occurs when the price is above the equilibrium value.
C)implies that there is a surplus of the product in the market.
D)can occur even at the equilibrium price.
6
When an excess demand exists:
A)supply will rise.
B)demand will fall.
C)prices will rise.
D)prices will fall.
7
The demand curve:
A)illustrates the relationship between income and quantity demanded.
B)illustrates the relationship between supply and demand.
C)illustrates the relationship between price and output.
D)illustrates the relationship between price and quantity demanded.
8
Suppose that beer and pizza are complementary goods. An increase in the price of pizza will:
A)reduce the demand for pizza.
B)reduce the demand for beer.
C)increase the supply of pizza.
D)increase the demand for beer.
9
An inferior good is a good:
A)that is of lower quality than the industry standard.
B)that tends to break within the first three months after purchase.
C)for which demand decreases when consumer incomes increase.
D)that has a downward-sloping demand curve.
10
In most cases:
A)supply curves are vertical.
B)supply curves are horizontal.
C)supply curves are upward-sloping.
D)supply curves are downward-sloping.
11
An increase in wages paid to employees will:
A)reduce a firm’s profits but not affect the product price.
B)make employees more efficient and increase a firm’s profits.
C)shift the product supply to the right and increase the market price.
D)reduce the product supply and increase the market price.
12
Which of the following is not a likely result of rent controls?
A)The stock of rental units tends to deteriorate over time.
B)An increase in the number of affordable apartments for rent.
C)Rental units are converted into condominiums.
D)A shortage a rental accommodations.
13
Price floors and ceilings are examples of:
A)Shortcomings of the market system.
B)Government controls on production levels.
C)Government controls on market pricing.
D)Inefficiencies resulting from unregulated markets.
14
The market demand curve is:
A)the horizontal summation of the individual demand curves.
B)the demand curves associated with the largest demographic group.
C)the demand curve of the single biggest buyer of a good or service.
D)the vertical summation of the individual demand curves.
15
Markets may not be an efficient way to allocate resources when:
A)demand is subject to changes in consumer tastes.
B)supply is influenced by changing weather patterns.
C)incomes are not equally distributed throughout the economy.
D)prices are rigid or slow to adjust.





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