Practice Questions for Supply and Demand

Changing which of the following would not shift the demand curve?

a. Price of the product

b. Income of the buyers

c. Prices of substitutes

d. Prices of complements

e. All would shift the curve

Consumers are willing to purchase more cars as the price of cars falls. Graphically this is represented by:

a. A movement downward along the demand curve

b. A movement upward along the demand curve

c. A rightward shift in demand

d. A leftward shift in demand

A technological improvement that lowers the cost of production is likely to cause

the supply curvea. To shift to the left

b. To shift to the right

c. Become less responsive to price change

d. Remain the same

If supply of an item increases while demand remains the same, the new

equilibrium price willa. Stay the same

b. Increase

c. Decrease

d. Move left

Draw a supply and demand graph.

Chart equilibrium

Increase demand

What happens to P and Q?

Draw a graph indicating a ceiling price of $3.00.

If Dominos decides to buy a new oven which would allow them to cook more pizza per hour, what would their supply curve look like?

WHAT HAPPENS TO THE SUPPLY CURVE IF THE FOLLOWING

OCCURS?In the production of cedar chests

1. The cost of nails increases?

2. A new saw is discovered to cut cedar quicker

3. The government requires every soldier in the army is to send home a cedar chest

What happens to demand if the following happens?

1. Personal income decreases

2. You decide to go on the Atkins diet. What happens to your demand for pasta?

3. You are a salad lover, and the price of lettuce goes down.

Draw the proper corresponding graph

A hurricane hits Florida. Much damage ensues. The roofing business is suddenly an opportunity to make lots of money.

Demand for roofing in Florida?

Supply of roofing in Florida?

Price of roofing in Florida?

Price of roofing in Texas?

• . If Joey goes surfing for four hours instead of earning $10 per hour for those four hours, his opportunity cost is:

• a. the good time spent surfing

• b. the cost of gasoline used to get to the beach

• c. the travel time to the beach

• d. $40

. Which of the following causes a movement along a supply curve?

• a. a change in the resource costs.

• b. a change in technology

• c. a change in the price

• d. all of the above

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