CIA4U1 Self-Test on Aspects of Supply and Demand
1. Prices:
A) allow sellers to determine what goods to sell.
B) help buyers find possible substitute goods.
C) contain information useful for all people involved in a transaction.
D) allow sellers to determine what goods to sell, help buyers find possible substitute goods, and
contain information useful for all people involved in a transaction.
2. Markets bring buyers and sellers together to conduct transactions.
A) True
B) False
3. If buyers do not value a specific product, they will pay the asking price very quickly.
A) True
B) False
4. When a shopper does not purchase clothing from the sale rack in a department store, the
shopper is using price to communicate preference.
A) True
B) False
5. Describe how markets may differ from one another and use examples to support your
discussion.
6. The equation for the demand NA NA NA
7. If the NA NA
NA
8. Demand refers to the goods and services people are willing to sell during a set time period.
A) True
B) False
9. As the price of a bag of Doritos increases, the quantity demanded of this product will decrease.
A) True
B) False
10. The price of any product must also include the approximate cost of the time needed to
consume it.
A) True
B) False
11. State the law of demand and explain how it relates to changes in the price of 2-liter bottles of
Classic Coke.
12. When a consumer's income level is low, he/she is more likely to purchase goods.
A) complementary
B) substitute
C) normal
D) inferior
13. (Figure 3.1) Which of the following would change demand from D0 to D1?
A) increase in consumer income
B) change in consummer taste so that consumers want less of a product
C) increase in the price of a substitute good
D) decrease in the price of a complement
14. An decrease in the price of peanut butter causes the demand for jelly to:
A) increase.
B) decrease.
C) stay the same.
D) There is no relationship between the price of peanut butter and the demand for jelly.
15. A decrease in the price of Coke will cause the demand for Pepsi to:
A) increase.
B) decrease.
C) stay the same.
D) There is no relationship between the price of Coke and the demand for Pepsi.
16. Which of the following would be considered a complementary good for a kayak?
A) canoe
B) jet ski
C) life jacket
D) good weather
17. A widespread advertising campaign for a new product may change consumers' tastes and
preferences.
A) True
B) False
18. As your income increases, you are less likely to purchase normal goods.
A) True
B) False
19. What are the five determinants of demand?
20. What factors would cause an increase in the demand for trans-fat-free Crisco shortening?
21. What factors would cause a decrease in the demand for diet Pepsi?
22. Which of the fo
23. Demand for ice cream increases when:
A) the price of ice cream increases.
B) the price of ice cream decreases.
C) consumers purchase more ice cream at every price point.
D) consumers purchase less ice cream at every price point.
24. A change in the quantity demanded of hamburgers occurs only when the price of hamburgers
changes.
A) True
B) False
25. A change in the quantity demanded of hamburgers occurs when the price of hot dogs
changes.
A) True
B) False
26. Describe the difference between a change in demand and a change in quantity demanded.
Include a graph within your explanation.
27. The supply curve:
A) slopes downward and to the right.
B) shows a negative relationship between price and quantity supplied.
C) shows a positive relationship between price and quantity supplied.
D) shows that producers can charge whatever price they wish for their products.
28. Supply is the maximum amount of a product that consumers are willing to purchase at various
prices.
A) True
B) False
29. The quantity supplied of Heinz ketchup will vary according to its own price.
A) True
B) False
30. To calculate market supply, horizontally sum the individual supply curves at each price.
A) True
B) False
31. Discuss the law of supply and the role of opportunity costs.
32. Expectations of a price decrease in cheese may cause:
A) dairy farmers to produce more cheese than milk in the short run.
B) dairy farmers to produce less cheese than milk in the long run.
C) consumers to buy more cheese now.
D) dairy farmers to produce more cheese than milk in the short run and to produce less cheese
than milk in the long run.
33. If the number of tomato growers in the market increases:
A) the supply of tomatoes increases.
B) the supply of tomatoes decreases.
C) the supply of tomatoes remains constant.
D) the supply curve for tomatoes shifts to the left.
34. Subsidies on domestically produced sport utility vehicles cause a(n):
A) increase in the supply of domestic sport utility vehicles.
B) increase in the supply of foreign sport utility vehicles.
C) decrease in the supply of domestic sport utility vehicles.
D) decrease in the supply of foreign sport utility vehicles.
35. Newer technology may cause an increase in the supply of product.
A) True
B) False
36. If the price of chocolate chips increases, Mrs. Jones's Cookie Company will increase its
supply of peanut butter chocolate chip cookies.
A) True
B) False
37. If the price of Nike running shoes increases, Nike will supply fewer running shoes.
A) True
B) False