Economics and Market Behavior Quiz

If a company expects the price of materials to rise soon, what might it do to its current supply?

• Reduce production now

• Increase production now

• Stop producing the product

• Wait for the price to rise

What happens when more companies enter a market with the same product?

• The supply decreases

• The supply increases and prices may drop

• The price goes up

• The demand stays the same

Which of the following is an example of a substitute good?

• Shoes and socks

• Tea and coffee

• Pizza and soda

• Gasoline and electric cars

If consumers expect their income to increase in the future, they are likely to:

• Spend less money now

• Spend more money on luxury items

• Save all their money

• Stop spending on non-essential items

How does advertising affect consumer demand for a product?

• It usually decreases the demand for a product.

• It can make consumers more aware of a product and increase demand.

• It has no effect on demand.

• It makes the product more expensive.