Demand and Supply Multiple Choice Questions and Answers

31. A decrease in quantity demanded caused by an increase in price is represented by a

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

32. People come to expect that the price of a gallon of gasoline will rise next week. As a result,

1. next weeks supply of gasoline decreases.
2. the price of a gallon of gasoline falls today.
3. todays supply of gasoline increases.
4. todays demand for gasoline increases.

33. A drop in the price of a compact disc shifts the demand curve for prerecorded tapes leftward. From that you know compact discs and prerecorded tapes are

1. normal goods.
2. substitutes.
3. inferior goods.
4. complements.

34. People buy more of good 1 when the price of good 2 rises. These goods are

1. normal goods.
2. complements.
3. substitutes.
4. inferior goods.

35. By definition, an inferior good is a

1. normal substitute good.
2. good for which demand decreases when its price rises.
3. want that is not expressed by demand.
4. good for which demand decreases when income increases.

36. A substitute is a good

1. of higher quality than another good.
2. that is not used in place of another good.
3. that can be used in place of another good.
4. of lower quality than another good.

37. Which of the following influences peoples buying plans and varies moving along a demand curve?

1. preferences
2. the price of the good
3. income
4. the prices of related goods

38. Which of the following is NOT held constant while moving along a supply curve?

1. prices of resources used in production
2. expected future prices
3. the number of sellers
4. the price of the good itself

39. The opportunity cost of good A in terms of good B is equal to the

1. ratio of the price of good B to the price of good A.
2. ratio of the price of good A to the price of good B.
3. price of good A minus the price of good B.
4. price of good B minus the price of good A.

40. A decrease in the quantity supplied is represented by a

1. rightward shift in the supply curve.
2. movement down the supply curve.
3. leftward shift in the supply curve.
4. movement up the supply curve.