Consumer Surplus and Demand Quiz

Consumer surplus indicates that:

Which of the following will not cause a change in the demand for coffee (illustrated by a shift of the demand curve)?

• A decrease in the price of milk, a complement.

• An increase in the price of coffee.

• An increase in the price of tea, a substitute.

• An increase in the number of people drinking coffee.

• An increase in the income of households.

If there is an increase in the price of red meat, a substitute in production for milk, then:

• the supply of milk will increase.

• the demand for milk will decrease.

• the supply of milk will decrease.

• there will be a movement along the supply curve for milk.

• none of the above will result.

Below the equilibrium point, the quantity demanded is said to be

• Less than quantity supplied

• More that quantity supplied

• Quantity demanded is equal to quantity supplied

When economist talk about demand, they are referring to the quantity of something that people

• Actually buy given their level of income

• Are willing and able to buy at a specific price

• Are willing and able to buy at each possible price

According to the law of demand

• An increase in consumer's income will increase the quantity demanded at each price level

• An increase in the price will result in an outward shift of the demand curve

• People will demand a greater quantity when the price is low and less quantity when price is high

If the demand curve at a certain point

Which of the following factors would cause an increase in the demand for beef?

• An increase in the price of chicken

• An improvement in farming techniques

• A fall in the price of land suitable for rearing of cattle