1.____________ is the total number of units of a good or service producers are willing to sell at a given price. This is not to be confused with __________, which is a function representing the relationship between quantity supplied and different prices.

a. Quantity supplied;supply

b. Quantity output;production

c. Quantity produced; output

d. Quantity sold; supply

2.Market equilibrium is defined as the point where _______________ .(Select all that apply.)

a. supply and demand cross

b. quantity supplied is greater than quantity demanded

c. where consumers want to purchase more from producers than is available

d. quantity supplied equals quantity demanded

3Which of the following isnota true statement about "demand"?

a. Demand is fundamentally based on needs and wants.

b. Demand is the relationship between a range of prices and the quantities demanded at those prices.

c. Demand is based on ability to pay.

d. Demand is the same as quantity demanded.

4.By definition,_______________ occurs when quantity supplied is greater than quantity demanded

a. a shortage

b. an equilibrium

c. a surplus

d. a market share

5.______________ is a table that shows a range of prices for a certain good or service and the quantity demanded at each price.

a. Quantity demanded

b. A budget constraint

c. A demand schedule

d. A supply schedule

6.A rise in the price of a substitute for corn flakes will ________________ demand for corn flakes.

a. decrease

b. increase

c. have no effect

d. none of the above

7.If bacon and eggs are complementary goods, a rise in the price of eggs will _____________ the demand for bacon.

a. increase

b. decrease

c. not affect

d. none of the above

8.Which of the following will increasethe demand curve?

a. Discouraged buying based on future expectations.

b. A drop in the price of substitutes.

c. A rise in the price of complements.

d. A rise in income (for a normal good).

9.John is studying the effects of income on the demand for peppers. Which factors are held constant when using the "ceteris paribus" assumption?

a. income

b. all factors affecting demand, except income

c. all factors affecting demand, including income

d. none of the above

10.Which of the following would shift the demand curve?

a. changing tastes or preferences of consumers

b. changing income levels

c. expectations about future prices

d. all of the above

11.Which of the following factors will affect the overall supply of hats, a normal good,in the entire market?

Please selecttwocorrect answers.

a. higher textile costs

b. adecrease in overall consumer income

c. lower prices for trademarked logos

d. a drop in the price of a competitor's hats

12.A decrease in demand for _________________ results from a rise in income.

a. inferior goods

b. irregular goods

c. normal goods

d. abnormal goods

13.In general, improvements in technology that is used to produce a good will result in ___________.

a. a decrease in supply

b. a shortage of the good

c. an increase in supply

d. higher operating costs

14.Assumea market is currently at the equilibrium price and quantity, and a price ceiling is set below equilibrium price. Which of the following statements is true:

a. The quantity demanded will rise and the quantity supplied will fall, causing a shortage.

b. There is nothing causing the price to fall fromthe equilibrium level.

c. There is nothing preventing the price from rising to its equilibrium level.

d. The quantity supplied will rise and the quantity demanded will fall, causing a surplus.

15.Government intervention of setting price controls can impactthe __________________. For example, when a price floor is set above the equilibrium price, a very likely outcome is a ______________ in the market.

a. market equilibrium;surplus

b. market equilibrium;shortage

c. supply schedule; surplus

d. demand schedule;shortage

16.The area found __________ the market price and _____________ the demand curve is best known as consumer surplus.

a. above, above

b. above, below

c. below, below

d. below, above

17.Producer surplus is best definedas _________________.

a. the profit ofproducers when they make more goods than are demanded

b. the profit ofproducers when there are too many producers for a certain demand in a market

c. the profit that producers make above the cost of production

d. the intangible profits producers make in addition to the goods they sell