Economy Worksheets With Answer Key Page 9
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16Practice Questions Week 2 Day 3
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
1. Of the following, which is true of the relationship between the quantity of a good supplied and its price?
a.
As price increases, the quantity supplied usually decreases.
b.
As price increases, the quantity supplied usually increases.
c.
As price increases, supply increases.
d.
When demand increases, so will supply.
e.
They always meet at the point of equilibrium in the market.
____
2. Supply curves are usually assumed to slope upward because
a.
profits fall as prices rise
b.
a higher price leads to increases in demand
c.
a higher price leads to decreases in demand
d.
a higher price attracts resources from other less valued uses
e.
firms drop out of the market as prices rise
____
3. What do supply and demand curves have in common?
a.
They both usually slope upward.
b.
They both show a relationship between quantity and price.
c.
They both usually slope downward.
d.
They can both shift in response to changes in income or wealth.
e.
Neither of them is influenced by the size of the population.
____
4. The law of supply states that the quantity supplied of a good and
a.
the price of a key input are inversely related
b.
its price are inversely related
c.
the price of a key input are positively related
d.
its price are positively related
e.
the price of an alternate good are positively related
____
5. Which of the following statements is correct?
a.
The demand curve typically slopes upward; the supply curve typically slopes downward.
b.
The demand curve typically slopes downward; the supply curve typically slopes upward.
c.
Both the demand and supply curves typically slope downward.
d.
Both the demand and supply curve typically slope upward.
e.
The demand curve is typically vertical; the supply curve is typically horizontal.
____
6. An increase in the price of a particular good, with all other variables constant, causes
a.
a movement along a given supply curve to a lower quantity supplied
b.
a shift to a different supply curve with lower quantities supplied
c.
a movement along a given supply curve to a higher quantity supplied
d.
a shift to a different supply curve with higher quantities supplied
e.
no movement along a given supply curve unless demand also changes
____
7. Which of the following is assumed constant along a given supply curve for pistachio ice cream?
a.
the price of pistachios and the price of pistachio ice cream
b.
the price of pistachio ice cream and the price of alternate flavors of ice cream
c.
the prices of alternate goods, but not the prices of inputs
d.
all variables affecting supply other than the productive capacity of the industry
e.
all variables affecting supply other than the price of pistachio ice cream
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