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Student Self-test Questions
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1
When we know the quantity of a product that buyers wish to purchase at each possible price, we know:
A)demand
B)supply
C)excess demand
D)excess supply
2
Supply is the quantity of a good sellers wish to sell each time the market opens.
A)True
B)False
3
Supply is the ________ of a good sellers wish to sell at each possible _____.
A)price, quantity
B)cost, demand
C)quantity, price
D)cost, price
4
The equilibrium price clears the market; it is the price at which:
A)Everything is sold.
B)Buyers spend all their money.
C)Quantity demanded equals quantity supplied.
D)Excess demand is zero.
E)c and d.
5
Excess supply exists when the quantity supplied exceeds the quantity demanded at the ruling price.
A)True
B)False
6
The demand curve shows the relation between _____ and ________, holding other things constant.
A)income, quantity
B)tastes, quantity
C)income, tastes
D)price, quantity
7
When a market is in equilibrium:
A)Quantity demanded equals quantity supplied.
B)Excess demand and excess supply are zero.
C)The market is cleared by the equilibrium price.
D)All of the above
8
________ and ________ do not directly affect the demand curve.
A)the price of related goods, consumer incomes
B)consumer incomes, tastes
C)the costs of production, bank opening hours
D)the price of related goods, preferences
9
A change in price can cause a shift of a demand curve.
A)True
B)False
10
A demand curve can shift only because of changing:
A)incomes
B)prices of related goods
C)tastes
D)all of the above
11
A supply curve is only directly affected by:
A)technology
B)input costs
C)government regulation
D)all of the above
12
An increase in price will cause a supply curve to shift to the left.
A)True
B)False
13
If a price increase of good A increases the quantity demanded of good B, then good B is a:
A)substitute good
B)complementary good
C)bargain
D)inferior good
14
An increase in consumer income will increase demand for a _______ but decrease demand for a _________.
A)substitute good, inferior good
B)normal good, inferior good
C)inferior good, normal good
D)normal good, complementary good
15
Normally, 'holidays abroad' can be regarded as a:
A)inferior good
B)substitute good
C)normal good
D)complimentary good
16
Supermarket low price own-brands can normally be regarded as inferior goods.
A)True
B)False
17
______ can be regarded as a substitute for _________.
A)milk, sugar
B)butter, margarine
C)cars, petrol
D)pipes, tobacco
18
Price controls are government rules or laws that forbid:
A)the adjustment of prices to clear markets.
B)the adjustment of demand to clear markets.
C)the adjustment of supply to clear markets.
D)the existence of markets.
19
A floor price that is set above the equilibrium market clearing price will lead to:
A)excess demand
B)excess supply
C)shortages
D)no change
20
Price ceilings are imposed to increase the price above the free market equilibrium price.
A)True
B)False







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