Understanding Supply and Demand Concepts

The diagram represents a

• increase in demand

• decrease in demand

• change in quantity demand

• none of the above

What is the Equilibrium Price?

• 1

• 2

• 3

• 4

What is market equilibrium?

• The point where supply exceeds demand.

• The point where demand exceeds supply.

• The point where supply equals demand.

• The point where prices are highest.

Which of the following would cause a shift in the demand curve to the right?

• A decrease in consumer income.

• An increase in the price of a substitute good.

• A decrease in the price of a complementary good.

• A decrease in the number of consumers.

What happens to the supply curve when there is an improvement in production technology?

• It shifts to the left.

• It shifts to the right.

• It remains unchanged.

• It becomes vertical.

If the price elasticity of demand for a product is greater than 1, what does this indicate?

• Demand is inelastic.

• Demand is elastic.

• Demand is unitary elastic.

• Demand is perfectly inelastic.

Which of the following scenarios would likely cause a leftward shift in the supply curve?

• A decrease in the cost of raw materials.

• An increase in government subsidies.

• An increase in production costs.

• A technological advancement.

What is the effect on equilibrium price and quantity when there is an increase in demand and supply remains constant?

• Price decreases, quantity decreases.

• Price increases, quantity increases.

• Price remains constant, quantity increases.

• Price increases, quantity decreases.

If a product has a price elasticity of supply of 0.5, what does this mean?

• Supply is perfectly elastic.

• Supply is elastic.

• Supply is inelastic.

• Supply is unitary elastic.

Which of the following would cause a movement along the demand curve rather than a shift of the demand curve?

• A change in consumer preferences.

• A change in the price of the good itself.

• A change in consumer income.

• A change in the price of a substitute good.