UCLA | 2026 Updated | Original Practice Questions with Fully
Explained Solutions
SECTION 1: SUPPLY AND DEMAND (Questions 1–15)
1. Which of the following will cause a movement along the
demand curve for coffee?
A) A change in consumer income
B) A change in the price of coffee
C) A change in the price of tea
D) A change in consumer preferences
Answer B:
Rationale: A movement along the demand curve is caused only by
a change in the good's own price. A shift of the demand curve is
,caused by changes in income, prices of related goods, tastes,
expectations, or number of buyers. ---
2. If the price of coffee increases, what happens in the market
for tea (a substitute)?
A) Demand for tea decreases
B) Demand for tea increases
C) Supply of tea decreases
D) Quantity demanded of tea decreases
Answer B:
Rationale: Coffee and tea are substitutes. When the price of coffee
rises, consumers switch to tea, increasing demand for tea (shift
right). ---
3. If the price of coffee increases, what happens in the market
for coffee creamer (a complement)?
A) Demand for creamer decreases
B) Demand for creamer increases
C) Supply of creamer increases
D) Quantity demanded of creamer increases
,Answer A:
Rationale: Coffee and creamer are complements. Higher coffee
prices reduce coffee consumption, which reduces demand for
creamer (shift left). ---
4. A technological improvement in coffee production will:
A) Increase demand for coffee
B) Decrease supply of coffee
C) Increase supply of coffee
D) Increase quantity supplied of coffee
Answer C:
Rationale: Technology improvements lower production costs,
shifting the supply curve right (increase in supply). ---
5. If both demand and supply increase, what happens to
equilibrium price and quantity?
A) Price rises, quantity rises
B) Price falls, quantity rises
C) Price is indeterminate, quantity rises
D) Price rises, quantity is indeterminate
, Answer C:
Rationale: Demand increase raises P and Q; supply increase
lowers P and raises Q. Quantity definitely rises, but price depends
on the relative magnitudes. ---
6. A price ceiling set below equilibrium will cause:
A) A surplus
B) A shortage
C) No change
D) An increase in supply
Answer B:
Rationale: A binding price ceiling (below equilibrium) causes
quantity demanded to exceed quantity supplied, creating a
shortage. ---
7. A price floor set above equilibrium will cause:
A) A surplus
B) A shortage
C) No change
D) An increase in demand
Explained Solutions
SECTION 1: SUPPLY AND DEMAND (Questions 1–15)
1. Which of the following will cause a movement along the
demand curve for coffee?
A) A change in consumer income
B) A change in the price of coffee
C) A change in the price of tea
D) A change in consumer preferences
Answer B:
Rationale: A movement along the demand curve is caused only by
a change in the good's own price. A shift of the demand curve is
,caused by changes in income, prices of related goods, tastes,
expectations, or number of buyers. ---
2. If the price of coffee increases, what happens in the market
for tea (a substitute)?
A) Demand for tea decreases
B) Demand for tea increases
C) Supply of tea decreases
D) Quantity demanded of tea decreases
Answer B:
Rationale: Coffee and tea are substitutes. When the price of coffee
rises, consumers switch to tea, increasing demand for tea (shift
right). ---
3. If the price of coffee increases, what happens in the market
for coffee creamer (a complement)?
A) Demand for creamer decreases
B) Demand for creamer increases
C) Supply of creamer increases
D) Quantity demanded of creamer increases
,Answer A:
Rationale: Coffee and creamer are complements. Higher coffee
prices reduce coffee consumption, which reduces demand for
creamer (shift left). ---
4. A technological improvement in coffee production will:
A) Increase demand for coffee
B) Decrease supply of coffee
C) Increase supply of coffee
D) Increase quantity supplied of coffee
Answer C:
Rationale: Technology improvements lower production costs,
shifting the supply curve right (increase in supply). ---
5. If both demand and supply increase, what happens to
equilibrium price and quantity?
A) Price rises, quantity rises
B) Price falls, quantity rises
C) Price is indeterminate, quantity rises
D) Price rises, quantity is indeterminate
, Answer C:
Rationale: Demand increase raises P and Q; supply increase
lowers P and raises Q. Quantity definitely rises, but price depends
on the relative magnitudes. ---
6. A price ceiling set below equilibrium will cause:
A) A surplus
B) A shortage
C) No change
D) An increase in supply
Answer B:
Rationale: A binding price ceiling (below equilibrium) causes
quantity demanded to exceed quantity supplied, creating a
shortage. ---
7. A price floor set above equilibrium will cause:
A) A surplus
B) A shortage
C) No change
D) An increase in demand
