Market Demand Schedule by zhp10685

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									Name: __________________________ Date: _____________ CH3 Test 3


    1. A market demand schedule for a product indicates that:
       A) as the product's price falls, consumers buy less of the good.
       B) as a product's price rises, consumers buy less of other goods.
       C) there is a direct relationship between price and quantity demanded.
       D) there is an inverse relationship between price and quantity demanded.


    2. When a specific demand schedule is graphed, the result is a:
       A) set of market equilibrium prices.
       B) demand curve.
       C) shortage.
       D) surplus.


    3. Graphically, the horizontal sum of all individual demand curves is known as:
       A) consumers' tastes and preferences.
       B) the market demand curve.
       C) the equilibrium price.
       D) consumer sovereignty.


    4. Which will not, ceteris paribus, cause the demand curve for good A to shift?
       A) a change in the price of A
       B) a change in the price of B, a complement
       C) a change in the price of C, a substitute
       D) an increase in average income
Use the following to answer question 5:
                     P



                    $5
Price (per pound)




                    4
                                     a
                     3
                                           b
                    2                                                   D2
                     1                                    D1
                                               D3
                         2   4   6    8 10 12 14 16 18 20                    Q
                                    Quantity demanded
                              (thousands of bushels per week)


                     5. Refer to the above diagram, which shows three demand curves for coffee. Which would
                        cause the change in the demand for coffee illustrated by the shift from D1 to D2?
                        A) a decrease in the price of tea
                        B) an increase in consumer incomes
                        C) an increase in the price of sugar
                        D) a technological improvement in the production of coffee


                     6. Which are not generally considered to be complementary goods?
                        A) gasoline and motor oil
                        B) beef and chicken
                        C) beer and pretzels
                        D) razors and razor blades


                     7. A decrease in the price of product X causes an increase in the demand for product Y.
                        Products X and Y are most likely to be:
                        A) apples and oranges.
                        B) butter and margarine.
                        C) hamburgers and pizza.
                        D) video recorders and videotapes.


                     8. The price of pork can be increased by:
                        A) a decrease in the cost of feed for pork producers.
                        B) decreased advertising of pork.
                        C) an increase in the cost of beef.
                        D) a subsidy to pork producers.




                                                               Page 2
Use the following to answer question 9:

P
                        B
         C      A



                5       4       6

                    2       1       3



                                           Q
    0


         9. Refer to the above graph. A decrease in demand would best be reflected by a change
            from:
            A) point 4 to 6.
            B) point 1 to 3.
            C) line A to B .
            D) line A to C .


        10. An increase in the quantity of automobiles supplied would be caused by which of the
            following?
            A) an increase in the demand for automobiles
            B) a decrease in the demand for automobiles
            C) higher prices for steel
            D) higher prices for gasoline


        11. Any improvement in overall production technology that permits more output to be
            produced with the same amount of inputs causes:
            A) a movement up the supply curve, resulting in both a higher equilibrium quantity and
                price.
            B) a rightward shift of the supply curve so that more is offered at each price.
            C) no movement of the supply curve but a fall in price and a decrease in quantity
                supplied.
            D) a leftward shift of the supply curve so that less is offered for sale at each price.




                                                 Page 3
Use the following to answer question 12:
                                                   S3
                     P
                                                        S1
                                                             S2
                    $5
Price (per pound)




                                          b
                    4
                                     a
                     3
                    2
                     1

                     0   2   4   6   8 10 12 14 16 18 20          Q
                                   Quantity supplied
                             (thousands of bushels per week)



                     12. Refer to the above diagram, which shows three supply curves for corn. Which of the
                         following would cause the change in the supply of corn illustrated by the shift from S1
                         to S3?
                         A) a decrease in the price of fertilizer
                         B) an increase in the price of irrigation equipment
                         C) an increase in consumer incomes
                         D) a change in consumer tastes in favor of cornbread


                     13. Which is not a determinant of supply?
                         A) the existing state of technology used by the firm
                         B) the cost of resources used in production
                         C) the level of government taxes and subsidies
                         D) the market price of the good


                     14. A market for a product is in equilibrium when:
                         A) product price equals demand.
                         B) the supply curve remains fixed.
                         C) quantity supplied equals quantity demanded.
                         D) quantity demanded is greater than quantity supplied.




                                                                  Page 4
Use the following to answer question 15:


 Price per unit   Quantity demanded/year Quantity supplied/year
     $ 5                  2,000                     0
       10                 1,800                   300
       15                 1,600                   600
       20                 1,400                   900
       25                 1,200                 1,200
       30                 1,000                 1,500



   15. Refer to the above table. In a free-market economy, the market price and quantity will
       adjust to:
       A) $10 and 2,000 units.
       B) $15 and 1,600 units.
       C) $20 and 900 units.
       D) $25 and 1,200 units.


Use the following to answer question 16:

The following data show the supply and demand schedules for a product.
Price per   Quantity demanded    Quantity supplied
  unit       per week (units)    per week (units)
 $ 40              100                 15
     50             50                 20
     60             48                 25
     70             45                 30
     80             40                 40
     90             30                 46
    100             25                 50




   16. Refer to the above data. The government now introduces a subsidy payment to
       producers of $30 per unit. Assuming a purely competitive market for the product, the
       new equilibrium price will be between:
       A) $40-$50.
       B) $50-$60.
       C) $60-$70.
       D) $70-$80.




                                                     Page 5
                        17. A television station reports that the price of orange juice has declined but the quantity
                            sold has increased. This situation would be caused by a(n):
                            A) increase in demand.
                            B) increase in supply.
                            C) decrease in demand.
                            D) decrease in supply.


                        18. We observe a market where the price has risen and the quantity being sold has declined.
                            This could be caused by a(n):
                            A) increase in demand.
                            B) increase in supply.
                            C) decrease in demand.
                            D) decrease in supply.


Use the following to answer question 19:

                                                  S3
                                                           S1
                                          4
                                                                 S2
Price of bicycles




                                      3
                                 2        1            5


                                              6                  D2

                                                            D1
                                                   D3

                    0            Quantity of bicycles


                        19. Refer to the above graph, which shows the market for bicycles. S1 and D1 are the
                            original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand
                            and supply curves. Starting from the initial equilibrium point (#1), what point on the
                            graph is most likely to result from an increase in wages of bicycle workers, and a
                            significant increase in the price of gasoline?
                            A) 2
                            B) 3
                            C) 4
                            D) 5




                                                                      Page 6
Use the following to answer question 20:

P                                P                           S
                                                   D1
                       S             D2



                            D2

                       D1

0                           Q    0                               Q
           (A)                               (B)



P                                P
    D     S1                         D        S2
                  S2                                    S1




0                           Q    0                               Q
            (C)                              (D)


    20. If peanut butter and grape jelly are complementary products, which diagram above
        illustrates the effect in the peanut butter market of a decrease in the price of grape jelly?
        A) A
        B) B
        C) C
        D) D




                                                   Page 7
Use the following to answer question 21:
$ Price                                           $ Price

                                                                                     S2
                                                                                          S1
                                   S1
                                             S2

                    E1                                       E2
P2 = P1                       E2                   P2 = P1             E1


                                        D2
                                                                                     D1
                                  D1                                      D2
      0             Q1       Q2                              Q2      Q1
                  Quantity                                                Quantity
                 Graph A                                              Graph B




          21. Refer to the four graphs above. Select the graph that best shows the change to demand
              and supply in a particular market given the following situation: In the market for boots,
              the wearing of boots becomes more fashionable among young consumers, and boot
              producers make better use of technology to increase production.
              A) Graph A
              B) Graph B
              C) Graph C
              D) Graph D




                                                                  Page 8
Answer Key
   1.   D
   2.   B
   3.   B
   4.   A
   5.   B
   6.   B
   7.   D
   8.   C
   9.   D
  10.   A
  11.   B
  12.   B
  13.   D
  14.   C
  15.   D
  16.   C
  17.   B
  18.   D
  19.   C
  20.   A
  21.   A




             Page 9

								
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