Demand and Supply MCQ Questions and Answers for Practice

1. A change in which of the following alters buying plans for cars but does NOT shift the demandcurve for cars?

1. a 10 percent decrease in the price of car insurance
2. a 20 percent increase in the price of a car
3. a 5 percent increase in peoples income
4. an increased preference for walking rather than driving

2. A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

1. a change in supply.
2. the law of demand.
3. the nature of an inferior good.
4. the law of supply.

3. Which of the following would NOT shift the demand curve for turkey?

1. a change in tastes for turkey
2. a decrease in the price of ham
3. an increase in income
4. a change in the price of a turkey

4. Which of the following is consistent with the law of demand?

1. A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded.
2. An increase in the price of a soda causes a decrease in the quantity of soda demanded.
3. An increase in the price of a tape causes an increase in the quantity of tapes demanded.
4. A decrease in the price of juice causes no change in the quantity of juice demanded.

5. The law of demand states that

1. a decrease in the price of a good shifts the demand curve leftward.
2. other things remaining the same, the higher the price of a good, the smaller is the quantity demanded.
3. other thing remaining the same, the higher the price of a good, the larger is the quantity demanded.
4. an increase in the price of a good shifts the demand curve leftward.

6. Blank tapes and prerecorded tapes are substitutes in production. An increase in the price of a blank tape will cause

1. a decrease in the supply of prerecorded tapes.
2. an increase in the quantity supplied of prerecorded tapes but not in the supply.
3. a decrease in the quantity supplied of prerecorded tapes but not in the supply.
4. an increase in the supply of prerecorded tapes.

7. The law of demand implies that if nothing else changes, there is

1. a linear relationship between price of a good and the quantity demanded.
2. a positive relationship between the price of a good and the quantity demanded.
3. a negative relationship between the price of a good and the quantity demanded.
4. an exponential relationship between price of a good and the quantity demanded.

8. Which of the following will shift the supply curve for good X leftward?

1. a situation in which quantity demanded exceeds quantity supplied
2. an increase in the cost of the machinery used to produce X
3. a decrease in the wages of workers employed to produce X
4. a technological improvement in the production of X

9. The quantity supplied of a good or service is the quantity that a producer

1. actually sells at a particular price during a given time period.
2. should sell at a particular price during a given time period.
3. is willing to sell at a particular price during a given time period.
4. needs to sell at a particular price during a given time period.

10. Which of the following does NOT shift the supply curve?

1. an increase in the price of the good
2. a fall in the price of a substitute in production
3. a decrease in the wages of labor used in production of the good
4. a technological advance

11. Which of the following causes an increase in the quantity supplied of good X but NOT in the supply of good X?

1. an increase in the price of X
2. an increase in the price of good Y, a complement in the production of X
3. an improvement in the technology for producing X
4. a reduction in the price of resources used to produce X

12. Because of increasing marginal cost, most supply curves

1. are horizontal.
2. have a negative slope.
3. are vertical.
4. have a positive slope.

13. The law of demand implies that, other things remaining the same,

1. as the demand for cheeseburgers increases, the price of a cheeseburger will fall.
2. as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease.
3. as income increases, the quantity of cheeseburgers demanded will increase.
4. as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will increase.

14. Which of the following pairs of goods are most likely substitutes?

1. compact discs and compact disc players
2. lettuce and salad dressing
3. cola and lemon lime soda
4. peanut butter and gasoline

15. The demand curve for a normal good shifts leftward if income ________ or the expected future price ________

1. decreases; falls
2. increases; rises
3. increases; falls
4. decreases; rises