Supply and Demand Test

Question 1

The law of demand states that people

Answer 1

Buy less as the price increases and buy More as the price decreases

Question 2

Demand is willingness and _______ to buy goods and services

Answer 2

Ability

Question 3

When plotting a demand curve, once needs to use a demand________ in order to determine the various quantities demanded and different prices.

Answer 3

Schedule

Question 4

The total demand for Apple products is called its what?

Answer 4

Demand Market

Question 5

What is the satisfaction a consumer receives when they consume a product?

Answer 5

Utility

Question 6

The concept of diminishing marginal utility means that?

Answer 6

A consumer enjoys their first glass of water more than their last.

Question 7

Which of the following can impact demand?

a. A change in income
b. A change in taste
c. A change in population
d. All of the above

Answer 7

All of the above

Question 8

The minimum wage is an example of what?

Answer 8

Price floor

Question 9

Why do we have price ceilings?

Answer 9

To keep prices from getting too high..

Question 10

Substitutes are products that can be replaced with one another in case the price of one ________

Answer 10

Increases

Question 11

Which of the following are substitutes?

a. Peanut Butter and Jelly
b. Shoes and Socks
c. Butter and Margarine

Answer 11

Butter and Margarine

Question 12

Complements are two products that are bought and used________

Answer 12

Together

Question 13

What is the amount of a good or service that producers are willing to sell?

Answer 13

Supply

Question 14

What is a government payment to producers for a specific action?

Answer 14

Subsidy (a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.)

Question 15

An intersection of the supply and demand curves is called the_________________, this is where the amount demanded equals the amount supplied

Answer 15

Equilibrium price/quantity

Question 16

Why is it important for businesses to know how much of their product to supply and how much will be demanded by customers?

Answer 16

So they will not have a surplus
So they can make the most money possible
So they will not have a shortage of products

Question 17

A surplus occurs when the amount demanded is ________ than the amount supplied

Answer 17

Less

Question 18

A shortage occurs when the amount supplied is________ than the amount demanded.

Answer 18

Less

Question 19

Which of the following states that suppliers will sell more items at a higher price and less items at a lower price?

a. The law of demand
b. The law of subsidies
c. The law of supply

Answer 19

The law of supply

Question 20

With complements, like coffee and doughnuts, if you increase the price for one the demand for the other_______

Answer 20

Decreases

Question 21

With substitutes, like Pepsi and Coke, if you reduce the price for one the demand for the other __________

Answer 21

Decreases

Question 22

A product whose quantity demanded changes greatly in response to a change in price is said to have a very______ demand

Answer 22

Elastic

Question 23

A product whose quantity demanded DOES NOT change greatly in response to a change in price is said to have a very________ demand

Answer 23

Inelastic

Question 24

An example of a good with a very inelastic demand would be________

a. water
b. luxury cars
c. vacations

Answer 24

Water