Demand and Supply Multiple Choice Questions and Answers

41. If the price of a good changes but everything else influencing suppliers planned sales remainsconstant, there is a

1. rotation of the initial supply curve around the initial price.
2. new supply curve that is to the right of the initial supply curve.
3. new supply curve that is to the left of the initial supply curve.
4. movement along the supply curve.

42. The law of demand implies that demand curves

1. shift leftward whenever the price rises.
2. shift rightward whenever the price rises.
3. slope down.
4. slope up.

43. A change in the price of a good

1. shifts the goods demand curve but does not cause a movement along it.
2. does not shift the goods demand curve but does cause a movement along it.
3. shifts the goods demand curve and also causes a movement along it.
4. neither shifts the goods demand curve nor causes a movement along it.

44. The law of demand states that, other things remaining the same, the higher the price of a good, the

1. smaller is the demand for the good.
2. smaller is the quantity of the good demanded.
3. larger is the quantity of the good demanded.
4. larger is the demand for the good.

45. If a producer can use resources to produce either good A or good B, then A and B are

1. substitutes in consumption.
2. complements in consumption.
3. complements in production.
4. substitutes in production.

46. Suppose people buy more of good 1 when the price of good 2 falls. These goods are

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

47. The quantity demanded is

1. the amount of a good that consumers plan to purchase at a particular price.
2. independent of the price of the good.
3. independent of consumers buying plans.
4. always equal to the equilibrium quantity.

48. When economists speak of preferences as influencing demand, they are referring to

1. the availability of a good to all income classes.
2. directly observable changes in prices and income.
3. the excess of wants over the available supplies.
4. an individuals attitudes toward goods and services.

49. Over the past decade technological improvements that have lowered the cost of producing an automobile have increased

1. the demand but not the supply of automobiles.
2. both the supply and the demand for automobiles.
3. the supply but not the demand for automobiles.
4. neither the supply nor the demand for automobiles.

50. If a good is an inferior good, then purchases of that good will decrease when

1. the demand for it increases.
2. population increases.
3. income increases.
4. the price of a substitute rises.