Microeconomics - Quiz 2

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs
• Buy fewer CDs
• Quantity demanded will not change

The law of supply states that if the price of CD’s rise, suppliers will

• Supply more CDs
• Supply fewer CDs
• Quantity supplied will not change

For the law of demand, as price rises, what happens to quantity demanded?

• it goes up
• it goes down
• it stays the same
• it is not effected

According to the laws of supply and demand, when will companies produce more of a product?

• When the price people will pay for it goes down

• When demand decreases

• When they can sell it for a higher price

• When the economy turns downward

What might happen if the demand for a new type of sneaker began rising quickly?

• The manufacturer would begin making fewer sneakers

• The sneaker company would raise the price of the sneakers

• People would refuse to pay more money for the sneakers

• The sneaker company would lower the price of the sneakers

The equilibrium point is at the confluence of the supply and demand curves. What does "confluence" mean?

• Topmost point

• Intersection

• Midpoint

• Lowest point

Why do prices go down when consumers start saving their money?

• Consumers become less willing to spend money on goods and services

• Manufacturers start producing fewer products

• Demand for currency goes up as people begin saving

• Demand for goods begins to outpace supply

Which condition would lead to the highest prices?

• Low supply, high demand

• High supply, high demand

• High supply, low demand

• Low supply, low demand

branch of economic theory which deals with behavior and

decision making by small units such as individuals and firms

• Demand schedule

• Supply

• Microeconomics

• supply curve

is the amount that producers sell at any given price

• quantity supplied

• change in quantity supplied

• subsidy

• supply elasticity