Demand and Supply Multiple Choice Questions and Answers

21. Most goods

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

22. Inferior goods are those for which demand increases as

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

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

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

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

25. A normal good is a good for which demand

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

26. An inferior good is a good for which demand

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

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

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

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

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

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

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

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

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