7 Supply & Demand Practice 1. What does Ceteris Paribus mean? What is the law of demand? As the price increases, the quantity demanded As the price decreases, the quantity demanded 3. What are the 3 reasons why the market demand curve is downward sloping? 1. 2. 3. 4. Which of the following will NOT cause the demand for video games to change? A- a change in the price of a close substitute B. a change in consumer incomes C. a change in the price of video games D. a change in consumer tastes F. a change in consumer preferences 5. Which of the following statements is correct? A decrease in the price of X will increase the demand for substitute product Y A decrease in income will decrease the demand for an inferior good An increase in income will decrease the demand for a normal good An increase in the price of X will decrease the demand for complementary product Y An increase in the price of X will increase the demand for complementary product Y 6. If Buyer's Maximum=$300, Seller's Minimum=$150, & Price=$350 then A. consumer's surplus is 50 consumer's surplus is 100 producer's surplus is 200 producer's surplus is 50 there would be no exchange 7. What is the Law of Supply? As the price increases, the quantity supplied As the price decreases, the quantity supplied 8. Why is the market supply curve upward sloping? 9. If there is an increase in supply for a good, what will most likely happen to the price and quantity of the good exchanged? Price Quantity A. No Change No Change B. Increase Increase C. Increase Decrease D. Decrease Increase E. Decrease Decrease 10. During a football game, it starts to rain and the temperature drops. The senior class, which runs the concession stand and is studying economics, raises the price of coffee from 50 cents to 75 cents a cup. They sell more quantity than ever before. Which answer explains this? A. The supply of coffee increased. B. The demand curve for coffee was elastic. C. The supply for coffee decreased. D. The demand for coffee increased. E. The supply curve for coffee was inelastic. Scanned with CamScanner