Question 1

Suppose the demand for a product shifts from $D_1$ to $D_2$ as shown in the first image. Which of the following could explain this shift?

Accepted Answer

A decrease in consumer taste or preference for the product.

Question 2

A decrease in taste or preference for a good is represented by a movement from:

Accepted Answer

D1 to D2.

Question 3

Which of the following would cause a decrease in the supply of milk?

Accepted Answer

An increase in the price of a product that producers sell instead of milk.

Question 4

Assume the graphs in the third image represent the demand and supply curves for women's clothing. Which panel best describes what happens in this market when the wages of seamstresses rise?

Accepted Answer

Panel (c)

Question 5

Given the supply and demand graph in the fourth image, what is the equilibrium price and quantity?

Accepted Answer

$P = 10$, $Q = 4$

Question 6

At a price of $15$, what is the quantity demanded and quantity supplied according to the fourth image?

Accepted Answer

Quantity demanded = 2, Quantity supplied = 6

Question 7

If the price of a substitute good increases, what is likely to happen to the demand curve for the original good?

Accepted Answer

It will shift to the right.

Question 8

Which of the following best describes the law of demand?

Accepted Answer

As price increases, quantity demanded decreases.

Question 9

If a government imposes a price ceiling below the equilibrium price, what is the likely outcome in the market?

Accepted Answer

A shortage of the good.

Question 10

Suppose the supply curve for a product shifts to the left. Which of the following could explain this?

Accepted Answer

An increase in the cost of production.

Question 11

If the demand for milk increases while the supply remains constant, what happens to the equilibrium price and quantity?

Accepted Answer

Price increases, quantity increases.

Question 12

Which of the following is NOT a determinant of demand?

Accepted Answer

Production technology.

Question 13

If the government provides a subsidy to milk producers, what is the likely effect on the supply curve for milk?

Accepted Answer

The supply curve shifts to the right.

Question 14

Which of the following scenarios would cause a movement along the demand curve rather than a shift of the demand curve?

Accepted Answer

A change in the price of the good itself.

Question 15

If the price of a product is above equilibrium, what will happen in the market?

Accepted Answer

There will be a surplus.

Demand, Supply, and Market Equilibrium: Key Concepts and Applications

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