7/13/23, 9:41 AM Unit 2 Supply and Demand
Worksheets / Social studies / Economics / supply and demand
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Unit 2 Supply and Demand
DATE :
55 Questions
1. Which letter shows the area of a shortage?
A B B C
C A
2. Total Revenue - Total Cost = _____
A Variable Revenue B Profit
C Revenue D Marginal Revenue
3. A price ceiling...
A would be above the equilibrium B would be at the equilibrium
C would be below the equilibrium
4. If the price goes up for a product, consumers buy less of that product and more of
another substitute.
A Law of demand B Law of diminishing marginal utility
C The income effect D The substitute effect
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7/13/23, 9:41 AM Unit 2 Supply and Demand
5. Supply has a ______________relationship between price and quantity supplied
A left B direct
C supply D right
6. A price floor...
A would be at the equilibrium B would be above the equilibrium
C would be below the equilibrium
7. Rent control, or the government controlling prices of rental properties is a type of …
A Price floor B Price ceiling
C Rationing D Surplus
8. What does the law of demand state?
The lower the price, the more people Everyone has limited income and they
A B
want the good or service will spend it all
The higher the price, the more people Services are bought and sold just like
C D
want the good or service goods
9. The best definition for fixed costs is
Costs that do not depend on the level of Costs that increase when you produce
A B
production more
C Costs that do not change
10. If the government set the price at $300, what would be the
result?
A Surplus of 2,000 B Surplus of 4,000
C Shortage of 2,000 D Shortage of 4,000
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7/13/23, 9:41 AM Unit 2 Supply and Demand
11. What is the Equilibrium Price?
A 2 B 4
C 1 D 3
12. Which two of the following goods are SUBSTITUTES?
A None of em! B supply & demand
C Tacos & babies D Coke & Pepsi
13. This graph represents...?
A Changes in quantity supplied B Changes in demand
C Changes in quantity demanded D Changes in supply
14. What does this curve represent?
A supply B demand
C equilibrium D shortage
15. The condition in which the quantity supplied of a good is greater than the quantity
demanded.
A Surplus B Equilibrium
C Disequilibrium D Shortage
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7/13/23, 9:41 AM Unit 2 Supply and Demand
16. Which of the following describes the relative elasticity in demand for toothpaste?
Demand is elastic because there are no Demand is inelastic because it is a luxury
A B
substitutes item
Demand is inelastic because it makes up Demand is inelastic because it is a low-
C D
a large share of most people’s budget cost necessity
17. Which letter shows the area of surplus?
A A B B
C C
18. Farmers in California have had wonderful weather. They have
produced the largest crop of watermelons in years. What will
happen to the price of watermelons?
A The price will go down. B The price will go up.
19. What is the income effect?
An increase in purchase of complements A change in quantity demanded caused
A B
based on an increase in income by a change in consumer income
A proportional change in quantity A change in demand caused by
C D
demanded based on income substitution
20. Why is a demand curve downward sloping?
Because quantity demanded increases as Because it reflects the desire, ability, and
A B
price decreases willingness of consumers
Because of the natural elasticity of the Because it shows how increasing
C D
market incentives changes demand
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21. Which of these would most likely increase the supply of soccer balls?
a transportation strike (truckers on
A B a government tax on sporting goods
strike)
C a decrease in the price of raw materials D an increase in the supply of tennis balls
22. If the demand for used cars decreases after the price of a new car falls, used cars and
new cars are
A inferior goods B substitute goods
C normal goods D complementary goods
23. The Law of Demand states that the quantity demanded of a product varies _______________
with its price.
A in a positive correlation B Inversely
24. The Law of Demand states that as price decreases…
A Production increases B Demand increases
C Wages decrease D Quality increases
25. New technology advances the rate at which furniture can be assembled. Why does this
change the supply?
A The number of producers changes. B The output rate declines.
C The expectations of consumers changes. D There is a change in cost of production.
26. The definition of the law of diminishing marginal utility
As more units are consumed the As price increases consumers are willing
A B
marginal utility falls. to pay more.
As more units are consumed the As price decreases quantity demanded
C D
marginal utility increases. increases.
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7/13/23, 9:41 AM Unit 2 Supply and Demand
27. What is the usual result of setting a price ceiling on rents?
More people want to rent apartments Construction jobs increase with the
A B
than are available to rent building of new apartment buildings
People can find apartments but cannot Houses are broken up into apartments to
C D
afford them meet the demand.
28. Which of the following two goods is more likely to be inelastically demanded?
A Demand for vitamins B Demand for insulin
29. Which of the following is the equilibrium price and quantity in
Graph 1?
A $3.00, 2,000 B $3.00, 3,000
C $2.00, 2,500 D $2.00, 1,500
30. The increase in output that arises from an additional unit of input
A Production function B Marginal product
C Diminishing marginal product D The cost of production
31. This graph represents...?
A Changes in demand B Changes in supply
C Changes in quantity demanded D Changes in quantity supplied
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32. Which letter shows the equilibrium?
A C B B
C A
33. The condition in which the quantity demanded of a good is greater than the quantity
supplied.
A Disequilibrium B Shortage
C Equilibrium D Surplus
34. Revenue generated by producing one additional unit of product.
A Total Revenue B Marginal Revenue
C Marginal Profit D Average Revenue
35. What is the Equilibrium Quantity?
A 70 B 60
C 50 D 80
36. When the quantity demanded for a product is less than the quantity supplied, the market
A has a surplus B has prices that are too low
C is in equilibrium D is controlled by a monopoly
37. What can cause a change in supply?
A All of the above B Changes in government policy
C Changes in the number of producers D Changes in technology
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7/13/23, 9:41 AM Unit 2 Supply and Demand
38. A mother who buys her son two sets of school uniforms every year regardless of changes
in their prices has a perfectly inelastic demand for school uniforms
A FALSE B TRUE
39. Cold weather in Florida has damaged this year’s orange
crop. Farmers have only half of the usual amount of oranges to
sell. What will happen to the price of oranges?
A The price will go down. B The price will go up.
40. If the price goes down for a product, the purchasing power increases for consumers,
allowing them to purchase more.
A The substitute effect B The income effect
C Law of demand D Law of diminishing marginal utility
41. Which of the following graphs shows the demand and supply
curves for Table 3?
A B
42. Which of these is the best example of diminishing marginal utility?
Bicycles become less useful as they get A shortage of bike paths make bicycles
A B
old and start to rust less useful
People with cards have less use for Someone who has one bicycle will have
C D
bicycles than people without cars have less use for another
43. The marginal production from 3 to 4 labors is ______ _.
A 8 B 4
C 2 D 7
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44. If the government set the price at $700, would that be a price
ceiling or floor?
A Price Floor B Neither
C Price Ceiling
45. The want or willingness a consumer has to purchase a good or a
service is called?
A supply B price
C shortage D demand
46. Which of the following best defines market equilibrium?
The point at which demand exceeds The point at which supply exceeds
A B
supply and prices are changing regularly demand and prices are stable
The point at which supply and demand
The point at which supply and demand
C D equal each other and prices are changing
equal each other and prices are stable
regularly
47. Which of the following is NOT a determinant of demand?
A The price of related goods B All are determinants of demand
C None are determinants of demand D Consumer expectations
E Changes in income
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7/13/23, 9:41 AM Unit 2 Supply and Demand
48. What happens to the demand curve for computers when the price increases from $500
to $700?
A B
C D
49. Differentiate a change in quantity demanded from a change in demand.
A change in quantity demanded creates a
A change in quantity demanded is never
new demand curve, while a change in
A B driven by price, while a change in
demand is movement along the existing
demand is always driven by price
demand curve
A change in quantity demanded is A change in quantity demanded is when
movement along the existing demand consumer expectations delay a purchase,
C D
curve, while a change in demand creates while a change in demand is a change in
a new demand curve demographics
50. Which of these situations best illustrates market equilibrium?
The amount of soap made matches the The price of soap does not vary much
A B
amount of soap that people want to buy from week to week.
Soap production ensures a good profit Everyone who wants or needs soap can
C D
for the manufacturer. easily afford to buy it.
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7/13/23, 9:41 AM Unit 2 Supply and Demand
51. What does this curve represent?
A equilibrium B supply
C surplus D demand
52. If suppliers expect prices to rise next year for their product, you would expect
The supply curve will shift to the left this The supply curve will shift to the right this
A B
year year
The quantity demanded will decrease The demand curve will shift to the left
C D
this year this year
53. French fries and ketchup
A A normal and an inferior good B Neither Normal nor inferior
C Substitutes D Compliments
54. Fixed Cost + Variable Cost =
A Variable costs B Fixed costs
C Total costs D Breakeven point
55. Supply depends on the willingness and ability of…
A Consumers to purchase B Advertisers to promote
C Donors to contribute D Producers to produce
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