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Multiple Choice Quiz
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1
Which of the following shows the relationship between the price of a good and the amount of that good that consumers want at that price?
A)supply curve
B)demand curve
C)supply schedule
D)production possibilities frontier
2
When the price of good X increases and consumers substitute good Y for good X, we call that the:
A)income effect.
B)backwards effect.
C)substitution effect.
D)demand effect.
3
When the price of good X increases and consumers demand less of good X because the increase in price has made them relatively poorer, we call that the:
A)income effect.
B)supply effect.
C)substitution effect.
D)money multiplier effect.
4
If we were to sum the quantity demanded by every consumer in the market at every price and plot those sums versus the price, we would obtain the:
A)supply curve.
B)summed demand curve.
C)market demand curve.
D)vertical demand curve.
5
Which of the following is not a determinant of demand for good X:
A)average income.
B)population.
C)tastes and preferences.
D)price of good X.
6
The demand curve will shift when:
A)the price of the good changes.
B)the price of the good changes and when the underlying determinants of demand change.
C)the underlying determinants of demand change.
D)never.
7
Which of the following factors will cause the supply curve to shift:
A)Changes in technology.
B)Changes in input prices.
C)Changes in the prices of related goods.
D)Changes in government policies.
E)All of the above.
8
The market-clearing price is also called the ___________ and is the price at which:
A)prevailing price; the supply and demand curve cross.
B)prevailing price; the supply curve crosses the y-axis.
C)equilibrium price; the supply and demand curve cross.
D)special price; the supply and demand curve cross.
9
Other things held equal, if demand increases, equilibrium price will __________ and equilibrium quantity will __________. However, if supply increases, equilibrium price will _________ and equilibrium quantity will __________, other things held equal.
A)decrease; decrease; increase; increase
B)increase; increase; decrease; increase
C)decrease; decrease; increase; decrease
D)increase; increase; decrease; decrease
10
The forces of demand and supply determine:
A)What is produced.
B)For whom the goods are produced.
C)How the goods are produced.
D)All of the above.





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