Demand & Supply// Price Changes in the Market

Question 1

Describes a consumer’s desire and willingness to pay a price for a specific good or service.

Answer 1

Demand.

Question 2

Demand refers to the continuous flow of purchases made over a given period of time.

Answer 2

True.

Question 3

When demand is greater than supply, price is pulled upward.

Answer 3

True- Shortage.

Question 4

These are the two price regulations set by the government.

Answer 4

Price ceilings and price floors.

Question 5

Maximum price; below MCP.

Answer 5

Price ceiling.

Question 6

Refers to the inefficient distribution of goods and services in the free market.

Answer 6

Market Failure.

Question 7

From MCP, both demand and supply proportionately increases due to non-price determinants.

Answer 7

D=S. Price remains the same.

Question 8

From MCP, supply decreases due to non-price determinants, while demand remains the same.

Answer 8

D>S. Shortage. Price goes up.

Question 9

From MCP, supply increases due to non-price determinants, while demand remains the same.

Answer 9

D

Question 10

From MCP, demand decreases due to non-price determinants, while supply remains the same.

Answer 10

D

Question 11

From MCP, demand increases due to non-price determinants, while supply remains the same.

Answer 11

D>S. Shortage. Price goes up.

Question 12

When demand is less than supply, prices are pushed downward.

Answer 12

True- Surplus.

Question 13

MCP stands for.

Answer 13

Marginal Cost Pricing.

Question 14

Number of commodities buyers are willing and able to buy.

Answer 14

Quantity demanded.

Question 15

Number of commodities buyers are willing but are not necessarily able to buy.

Answer 15

Potential demand.

Question 16

The Law of Supply states that as price increases, quantity supplied also increases; as price decreases, quantity supplied also decreases.

Answer 16

True.

Question 17

The number of commodities sellers are willing and able to sell at a given period of time.

Answer 17

Quantity supplies.

Question 18

The total amount of a specific good or service that is available to consumers.

Answer 18

Supply.

Question 19

Changes in demand due to non-price determinants refer to the movement along the demand curve.

Answer 19

False.

Question 20

Changes in quantity demanded due to changes in price.

Answer 20

Movement along the demand curve.

Question 21

Sums up the effect price changes have on consumer behavior.

Answer 21

Law of demand.

Question 22

The law of demand states as price increases, quantity demanded decreases; as price decreases, quantity demanded increases.

Answer 22

True.

Question 23

Summarizes the effect price changes have on producer behavior.

Answer 23

Law of Supply.

Question 24

In the LAW OF SUPPLY, price only reacts to the number of people who are willing and able to sell the product.

Answer 24

False.

Question 25

In the LAW OF DEMAND, price only reacts to the number of people who are willing and able to buy the product.

Answer 25

False.

Question 26

The effect of both Demand Pull Inflation and Cost Push Inflation is the increase in price.

Answer 26

True.

Question 27

The cause of cost push inflation is the increase in prices of inputs like labor, raw materials, etc.

Answer 27

True.

Question 28

The cause of demand pull inflation is greater demand vis-a-vis supply.

Answer 28

True.

Question 29

When demand is less than supply, shortage occurs.

Answer 29

False.

Question 30

When demand is greater than supply, shortage occurs.

Answer 30

True.

Question 31

Shift along the supply curve refers to the changes in quantity supplied due to changes in Price.

Answer 31

False.

Question 32

Movement along the supply curve refers to the changes in supply due to non-price determinants.

Answer 32

False.

Question 33

The Equilibrium Price is also known as the Market Clearing Price.

Answer 33

True.

Question 34

Minimum price; above MCP.

Answer 34

Price floor.

Question 35

Market power causes market failure.

Answer 35

True.