AP Micro Microeconomics: Supply and Demand 2

Question 1

A simultaneous decrease in both supply and demand for a good will definitely cause:

Accepted Answer

Equilibrium quantity to fall

Answer

Price to fall

Answer

Price to rise

Answer

Equilibrium quantity to rise

Question 2

If the price of steel rises significantly, what happens in the automobile market?

Accepted Answer

Supply of cars decreases

Answer

Demand for cars increases

Answer

Demand for cars decreases

Answer

Supply of cars increases

Question 3

A binding price floor set above the equilibrium price results in:

Accepted Answer

A surplus of the good

Answer

A shortage of the good

Answer

No change in quantity supplied or demanded

Answer

An increase in equilibrium price

Question 4

Which scenario best illustrates a movement along the demand curve rather than a shift of the demand curve?

Accepted Answer

A good's own price rises, causing consumers to buy less

Answer

Consumer incomes rise, increasing purchases of a normal good

Answer

A substitute good becomes cheaper, reducing demand

Answer

Consumer tastes shift toward the product

Question 5

In a competitive market, if quantity demanded exceeds quantity supplied at the current price, we would expect:

Accepted Answer

The price to rise until a new equilibrium is reached

Answer

The price to fall until a new equilibrium is reached

Answer

Firms to exit the market

Answer

The government to intervene

Question 6

An improvement in production technology for a good will most likely cause:

Accepted Answer

The supply curve to shift right

Answer

The demand curve to shift right

Answer

Both curves to shift right

Answer

The supply curve to shift left

Question 7

If goods X and Y are complements and the price of X falls, what happens in the market for Y?

Accepted Answer

Demand for Y increases, raising Y's price

Answer

Demand for Y decreases, lowering Y's price

Answer

Supply of Y increases, lowering Y's price

Answer

Supply of Y decreases, raising Y's price