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Demand and supply

The law of demand states that, other things constant, there is: A) B) C) D)
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an inverse relationship between price and the quantity demanded. an inverse relationship between price and demand. a direct relationship between price and the quantity demanded. a direct relationship between price and demand.

Which of the following would likely result in an increase in the demand for beef? A) B) C) D)
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A decrease in the supply of beef. An increase in family incomes. An increase in the price of feed grains. A decrease in the price of pork.

We would speak of a movement along the demand curve, rather than of a shift in demand, if: A) B) C) D)
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the price of that good rose. income rose. expectations changed. the prices of other goods changed.

To be consistent with the law of supply, a graph depicting price and quantity supplied will be: A) B) C) D) horizontal. vertical. positively sloped. negatively sloped.

According to the law of supply, the quantity of an item supplied will fall as a result of: A) B) C) D)
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an increase in the number of firms producing the item. decreases in the prices of inputs used to produce the item. an increase in the price of the item. a decrease in the price of the item.

Which of the following events can be expected to cause an increase in the supply of milk? A) B) C) D)
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A decrease in the price of feed for cows. A decrease in the number of dairy farmers. An increase in the price of milk. An increase in the demand for milk.

If the quantity demanded of a good is 2,000, and the quantity supplied of the same good is 1,000: A) B) C) D)
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the current price is below the equilibrium price. producers are not responsive to price changes. the current price is above the equilibrium price. consumers of this particular item do not buy less of it when its price increases.

If there is excess demand in the market, we can expect that: prices will rise because some suppliers will be able to sell their goods at higher A) prices. B) C) D)
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prices will fall because suppliers will find it in their interest to increase supply. prices will rise because firms will exploit consumers by decreasing supply. the supply curve will shift to the right to restore equilibrium.

If the demand for a product increases, it will cause: a decrease in supply and a higher equilibrium price and a lower equilibrium A) quantity. an increase in supply and a lower equilibrium price and a higher equilibrium

B) quantity. C) D)
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a higher equilibrium price and a higher equilibrium quantity. a lower equilibrium price and a lower equilibrium quantity.

For many years, the price of personal computers has fallen and the quantity sold has risen. This can best be attributed to: A) B) C) improved technology which has caused supply to shift rightward. improved technology which has caused supply to shift leftward. greater popularity which has caused demand to shift rightward.

an increase in the number of computer users, which has caused demand to shift D) rightward.