Demand and Supply Multiple Choice Questions and Answers for Practice

16. Good A and good B are substitutes in production. The demand for good A increases so that theprice of good A rises. The increase in the price of good A shifts the

1. demand curve for good B leftward.
2. supply curve of good B rightward.
3. supply curve of good B leftward.
4. demand curve for good B rightward.

17. Wants, as opposed to demands,

1. are the goods the consumer plans to acquire.
2. are the unlimited desires of the consumer
3. are the goods the consumer has acquired.
4. depend on the price.

18. A reduction in the price of a good

1. shifts the goods demand curve leftward but does not decrease the quantity demanded.
2. shifts the goods demand curve leftward and also decreases the quantity demanded.
3. neither shifts the goods demand curve leftward nor decreases the quantity demanded.
4. does not shift the goods demand curve leftward but does decrease the quantity demanded.

19. The quantity supplied of a good is

1. the same thing as the quantity demanded at each price.
2. the amount that the producers are planning to sell at a particular price during a given time period.
3. the amount the firm would sell if it faced no resource constraints.
4. equal to the difference between the quantity available and the quantity desired by allconsumers and producers.

20. The demand for a good increases when the price of a substitute ________ and also increases whenthe price of a complement ________.

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

21. Most goods

1. have vertical supply curves.
2. are normal goods.
3. are complements to each other.
4. have vertical demand curves.

22. Inferior goods are those for which demand increases as

1. income increases.
2. the price of a substitute rises.
3. the price of a substitute falls.
4. income decreases.

23. Good A and good B are substitutes in production. The demand for good A decreases, which lowersthe price of good A. The decrease in the price of good A

1. decreases the demand for good B.
2. increases the supply of good B.
3. decreases the supply of good B.
4. increases the demand for good B.

24. An increase in the number of fast-food restaurants

1. raises the price of fast-food meals.
2. increases the supply of fast-food meals.
3. increases the demand for fast-food meals.
4. increases the demand for substitutes for fast-food meals.

25. A normal good is a good for which demand

1. decreases when population increases.
2. increases when population increases.
3. decreases when income increases.
4. increases when income increases.

26. An inferior good is a good for which demand

1. decreases when income increases.
2. decreases when population increases.
3. increases when income increases.
4. increases when population increases.

27. The law of demand states that the quantity of a good demanded varies

1. directly with population.
2. directly with income.
3. inversely with the price of substitute goods.
4. inversely with its price.

28. A supply curve differs from a supply schedule because a supply curve

1. holds the number of suppliers constant, whereas the supply schedule allows the number tovary.
2. holds resource prices constant, whereas the supply schedule allows them to vary.
3. represents one firm, whereas the supply schedule represents all firms in the market.
4. is a graph and the supply schedule is a table.

29. As the opportunity cost of a good decreases, people buy

1. less of that good and also less of its complements.
2. less of that good but more of its complements.
3. more of that good and also more of its complements.
4. more of that good but less of its complements.

30. When we say demand increases, we mean that there is a

1. movement to the left along a demand curve.
2. leftward shift of the demand curve.
3. rightward shift of the demand curve.
4. movement to the right along a demand curve.