Basic Demand-Supply

Which of the following will NOT shift the demand curve?

1. 1. Decrease in income tax

   2. Increase in price of good

   3. Decrease in price of substitute good

   4. A change in consumer tastes and preference

Which of the following will NOT shift the supply curve?

1. 1. Decrease in price of good

   2. Increase in sales tax

   3. Decrease in oil prices

   4. Increase in availability of raw materials

A shortage arises in the market when

1. 1. Supply exceeds demand

   2. Demand exceeds supply

   3. Demand and supply are equal

   4. A or C

A surplus arises in the market when

1. 1. Supply exceeds demand

   2. Demand exceeds supply

   3. Demand and supply are equal

   4. A or C

An increase in the availability of substitute goods will cause demand for a good to ______ and its equilibrium price to ______

1. 1. Increase; increase

   2. Increase; decrease

   3. Decrease; increase

   4. Decrease; decrease

The intersection of the supply curve and demand curve is called:

1. 1. Market equilibrium

   2. Market-clearing level

   3. Both A and B

   4. Central point of efficiency

The demand curve slopes ______

1. 1. Upward 

   2. Downward

   3. Vertically

   4. Horizontally

The supply curve slopes ______

1. Upward 

2. Downward

3. Vertically

4. Horizontally

What will happen to demand when, all else held constant, the income of consumers increases?

1. 1. The demand curve will shift to the left

   2. The demand curve will shift to the right

   3. The supply curve will shift to the left

   4. The supply curve will shift to the right

What will happen to quantity supplied when, all else held constant, the price of a good falls?

1. 1. The quantity supplied will fall

   2. The quantity supplied will rise

   3. The quantity supplied will not change

   4. The quantity supplied will change as much as the quantity demanded

What will happen when, all else held constant, the price of a substitute good falls?

1. 1. The demand curve will shift to the left

   2. The demand curve will shift to the right

   3. The supply curve will shift to the left

   4. The supply curve will shift to the right

What will happen to supply when, all else held constant, the prices of input increase?

1. 1. The demand curve will shift to the left

   2. The demand curve will shift to the right

   3. The supply curve will shift to the left

   4. The supply curve will shift to the right

What will happen to quantity demanded when, all else held constant, the price of a good falls?

1. 1. The quantity demanded will fall

   2. The quantity demanded will rise

   3. The quantity demanded will not change

What is the Law of Supply?

What is the Law of Demand?