Deck 4: Supply and Demand: An Initial Look

Question 1

Change in the price of a good causes the demand schedule for that good to shift.

Answer 1

False

Question 2

Demand and quantity demanded are the same thing.

Answer 2

False

Question 3

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Answer 3

True

Question 4

An increase in price will decrease demand.

Question 5

"Demand" is a series of quantities demanded, one for each person in the market.

Question 6

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Question 7

A demand schedule's position is determined partly by the supply of a good.

Question 8

Very few societies have used price controls.

Question 9

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

Question 10

Governments of market-oriented economies never tamper with the price mechanism.

Question 11

The laws of supply and demand did not apply to Asian currencies.

Question 12

If the demand curve shifts outward and the supply curve remains the same, price will fall.

Question 13

A demand schedule shows the time over which different quantities will be demanded.

Question 14

A decrease in the price of VCRs will increase demand for video cassettes.

Question 15

A demand schedule relates prices of a particular good to quantities demanded.

Question 16

George Washington's troops at Valley Forge were almost destroyed by price controls.

Question 17

Changes in consumer preference toward small, imported automobiles have shifted their demand curves downward and to the left.

Question 18

A cold winter will increase the quantity of heating fuel demanded at every price.

Question 19

A change in the income of buyers will normally change demand.

Question 20

A change in the price of hamburgers will change the supply of hot dogs.

Question 21

A change in the price of a good has no effect on the supply schedule.

Question 22

Consumer income changes can shift market demand.

Question 23

A supply schedule can be plotted on a graph to yield a supply curve.

Question 24

Advertising has no effect on the demand schedule for a good.

Question 25

Supply can shift due to changes in price.

Question 26

Changes in the size of an industry may cause supply to shift.

Question 27

As more firms are attracted to an industry, the supply curve can be expected to shift to the right.

Question 28

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Question 29

The more firms that are attracted to an industry, the greater will be the quantity of product supplied at any given price.

Question 30

Demand curves can be affected by the prices of related goods.

Question 31

Demand shifts due to changes in price.

Question 32

Both demand and supply curves usually have positive slopes.

Question 33

A supply curve slopes upward because quantity supplied is higher when price is higher.

Question 34

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

Question 35

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Question 36

The position of a demand curve is unaffected by changes in the price of the good.

Question 37

An increase in price will increase supply.

Question 38

As price increases, additional suppliers are willing to produce a commodity.

Question 39

An increase in consumer income will shift both the supply and demand curves.

Question 40

When people suddenly want to buy something, supply increases.

Question 41

Technological advances shift the supply curve rightward.

Question 42

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Question 43

The laws of supply and demand force prices to an equilibrium.

Question 44

When price is below the equilibrium level, there is a shortage of the commodity being sold.

Question 45

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Question 46

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

Question 47

When price is above the equilibrium level, suppliers offer more than demanders wish to buy.

Question 48

Any factor that shifts the supply curve inward and to the left and does not affect the demand curve will raise the equilibrium price and reduce the equilibrium quantity.

Question 49

If supply increases, the equilibrium price will rise and the equilibrium quantity will fall.

Question 50

A price above equilibrium always yields a surplus.

Question 51

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Question 52

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

Question 53

At equilibrium, quantity demanded equals quantity supplied.

Question 54

If demand increases, the equilibrium price and equilibrium quantity will both fall, everything else being equal.

Question 55

Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

Question 56

A surplus occurs when price is higher than the market equilibrium.

Question 57

At equilibrium, the market will clear, with no surpluses or shortages occurring.

Question 58

A shortage occurs when price is higher than the market equilibrium.

Question 59

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Question 60

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Question 61

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

Question 62

Regulations are sometimes used to "correct" the failures of a market mechanism.

Question 63

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Question 64

Since rent controls have been in effect in New York City, apartments have been more plentiful.

Question 65

Price ceilings set a legal maximum price on a product or commodity.

Question 66

Sugar price supports primarily benefit consumers.

Question 67

Price floors are only effective below the market equilibrium.

Question 68

Rent controls are most often designed to protect the investment made by apartment building owners.

Question 69

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Question 70

Rent controls encourage investment in housing because they bring stability to the market.

Question 71

Price floors lead to market surpluses.

Question 72

A price ceiling is only effective if it is above the market equilibrium.

Question 73

Price floors set a legal minimum price on a product or commodity.

Question 74

Rent controls are designed to protect consumers from high rents.

Question 75

Price ceilings lead to market surpluses.

Question 76

Black-market prices are below equilibrium prices because sellers want to sell large quantities.

Question 77

Price supports increase the supply of affordable milk for U.S.families.

Question 78

If the government puts price controls on medical care, this will increase the supply of affordable care in the United States.

Question 79

A minimum wage law may cause unemployment among low-skill workers.

Question 80

A black market develops only when quantity demanded exceeds quantity supplied.