Economics Supply and Demand

Which diagram shows the effect of a decrease in incomes upon the market for big screen TVs? (Hint: shift left is a decrease, shift right is an increase; income does NOT affect supply)

• Graph A: demand shifts right

• Graph B: demand shifts left

• Graph C: supply shifts left

• Graph D: supply shifts right

Before Thanksgiving, the price of turkeys increase and the demand also increases. Is this a violation of the law of demand?

• No, according to the demand curve, a price increase results in a demand increase.

• Yes, according to the demand curve, a price increase results in a demand decrease.

• No, a non-price factor is increasing the demand and causing the demand curve to shift right.

• Yes, a non-price factor is increasing the demand and causing the demand curve to shift left.

The law of supply states that, all other factors being equal, as the product price _________________ the quantity of the product provided by sellers decreases.

• stays the same

• increases

• decreases

A new substitute enters the market causing a shift in the demand curve in the graph. What is the new equilibrium point after the substitute enters the market? (Hint: Determine which direction a substitute shifts the demand curve and use that direction to pick the resulting equilibrium point.)

• $10 and 1,500

• $7.50 and 1,250

• $10 and 1,250

• $7.50 and 1,500

Which economic field of study focuses on larger-scale topics such as gross domestic product and national unemployment?

• Microeconomics

• Macroeconomics

A new manufacturing technology makes it easier to make the product and causes a shift in the supply curve. What is the new equilibrium point after implementing the new technology? (Hint: Determine which direction a easier production shifts the supply curve and use that direction to pick the resulting equilibrium point.)

• $6 and 20,000

• $4 and 30,000

• $6 and 30,000

• $4 and 20,000

Supply and demand curves are used in which branch of economics?

• Macroeconomics

• Microeconomics

The Law of Demand states that, all other factors being equal, as the product price increases, the quantity of the product sought by buyers __________.

• decreases

• stays the same

• increases

Which direction does the demand curve slope?

• up

• down

• no slope

Refer to the graph. Which area indicates a shortage?

• A

• B

• C

• D