Question 1

Which of the following best describes the law of demand?

Accepted Answer

As the price of a good increases, the quantity demanded decreases, ceteris paribus.

Question 2

Suppose the government gives every student a free digital device that uses wireless earbuds. What is the most likely effect on the market demand curve for wireless earbuds?

Accepted Answer

The demand curve will shift to the right.

Question 3

Which of the following is held constant when drawing a demand curve?

Accepted Answer

Income, tastes and preferences, and prices of other goods

Question 4

If the price of solar panels falls significantly, what is the expected effect on the demand for coal in China?

Accepted Answer

The demand curve for coal will shift to the left.

Question 5

Which of the following pairs of goods are complements?

Accepted Answer

Printers and ink cartridges

Question 6

A decrease in income will shift the demand curve for which type of good to the right?

Accepted Answer

Inferior good

Question 7

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

Accepted Answer

A change in the good's own price

Question 8

Which equation represents a linear demand curve where $Q$ is quantity demanded and $P$ is price?

Accepted Answer

$Q = 12 - 2P$

Question 9

If the supply curve for oranges is $Q = 800P$ and the demand curve is $Q = -200P + 1,000$, what is the equilibrium price?

Accepted Answer

$P = 1$

Question 10

Which of the following will shift the supply curve for a product to the right?

Accepted Answer

An increase in productivity

Question 11

What is the law of supply?

Accepted Answer

As the price of a good increases, the quantity supplied increases, ceteris paribus.

Question 12

A new technology reduces the cost of producing wireless earbuds. What is the expected effect on the supply curve?

Accepted Answer

The supply curve shifts to the right.

Question 13

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer income

Question 14

At the equilibrium price in a market:

Accepted Answer

Quantity demanded equals quantity supplied.

Question 15

A shortage in a market occurs when:

Accepted Answer

Quantity demanded is greater than quantity supplied.

Question 16

If an early frost destroys a large percentage of the grape crop in British Columbia, what is the expected effect on the market for Canadian wine?

Accepted Answer

The supply curve for Canadian wine shifts to the left.

Question 17

Which of the following best describes a surplus in a market?

Accepted Answer

Quantity supplied is greater than quantity demanded.

Question 18

Suppose the demand for a product is given by $Q_d = 12 - 2P$ and the supply by $Q_s = 2P$. What is the equilibrium quantity?

Accepted Answer

$Q = 8$

Question 19

If both buyers and sellers expect the price of a product to increase in the future, what is the most likely immediate effect in the market?

Accepted Answer

The supply curve shifts left and the demand curve shifts right.

Question 20

Which of the following is an example of a change in quantity supplied rather than a change in supply?

Accepted Answer

A decrease in the price of the good itself

Chapter 3: Demand and Supply – Microeconomics Study Notes

Study Guide - Practice Questions

Study Guide - Flashcards