Chapter 2 - The Basics of Supply & Demand Questions and Answers Latest

Chapter 2 - The Basics of Supply & Demand
Questions and Answers 2025-2026 Latest
WhenAsupplyAincreases,AtheAsupplyAcurve
A.AbecomesAsteeper.
B.AshiftsAupward.
C.AshiftsAtoAtheAleft.
D.AshiftsAtoAtheAright.A-ACORRECTAANSWERS-D.AshiftsAtoAtheAright.
WhichAoneAofAtheAfollowingAwouldAnotAcauseAtheAdemandAforACoca-ColaAtoAshift?
A.ATheApriceAofAPepsi-ColaAincreases.
B.ATheAcostAofAproducingACoca-ColaAincreases.
C.ACoca-ColaAincreasesAitsAadvertisingAexpendituresAbyA20Apercent.
D.AAAnewAstudyAfindsAthatAdrinkingACoca-ColaAcausesAstomachAcancer.A-
ACORRECTAANSWERS-B.ATheAcostAofAproducingACoca-ColaAincreases.

WhichAofAtheAfollowingAwillAcauseAtheAdemandAforAkeroseneAheatersAtoAincrease?
A.AAAdecreaseAinAtheApriceAofAkerosene.
B.AAnAincreaseAinAtheApriceAofAkeroseneAheaters.
C.AAAdecreaseAinAtheApriceAofAkeroseneAheaters.
D.AAnAincreaseAinAtheApriceAofAkerosene.A-ACORRECTAANSWERS-
A.AAAdecreaseAinAtheApriceAofAkerosene.
SupposeAthatAunusuallyAcoldAweatherAcausesAtheAdemandAcurveAforAiceAcreamAtoAshiftAtoA
theAleft.AWhyAwillAtheApriceAofAiceAcreamAfallAtoAaAnewAmarket-clearingAlevel?
TheAcoldAweatherAwill
A.AcauseAtheAsupplyAcurveAtoAbecome
Afixed,AinitiallyAcreatingAaAsurplusAuntilAtheApriceAfallsAtoAwhereAquantityAsuppliedAagainAequ

alsAquantityAdemanded.
B.AshiftAtheAsupplyAcurveAtoAtheAleft
,AinitiallyAcreatingAaAsurplusAuntilAtheApriceAfallsAtoAwhereAquantityAsuppliedAagainAequalsAq
uantityAdemanded.
C.AshiftAtheAdemandAcurveAtoAtheAleft
,AinitiallyAcreatingAaAsurplusAuntilAtheApriceAfallsAtoAwhereAquantityAsuppliedAagainAequalsAq
uantityAdemanded.
D.AshiftAtheAdemandAcurveAtoAtheAleft
,AinitiallyAcreatingAaAshortageAuntilAtheApriceAfallsAtoAwhereAquantityAsuppliedAagainAequalsA
quantityAdemanded.
E.AshiftAtheAdemandAcurveAtoAtheAleft
,AinitiallyAcreatingAaAsurplusAuntilAtheApriceArisesAtoAwhereAquantityAsuppliedAagainAequalsA
quantiA-ACORRECTAANSWERS-C.AshiftAtheAdemandAcurveAtoAtheAleft
,AinitiallyAcreatingAaAsurplusAuntilAtheApriceAfallsAtoAwhereAquantityAsuppliedAagainAequalsAq
uantityAdemanded.
AAmarketAisAinAequilibriumAwhen
A.AtheAgovernmentAsetsAtheApriceAlowAenoughAsoAthatAallAconsumersAcanAaffordAtoApurcha
seAasAmuchAofAtheAproductAasAtheyAwant.

, B.AthereAisAaAsurplusAofAtheAproduct.
C.AtheAgovernmentAsetsAtheApriceAhighAenoughAsoAthatAallAproducersAcanAmakeAprofits.
D.AtheApriceAisAsuchAthatAtheAamountAconsumersAwantAtoAbuyAequalsAtheAamountAproduce
rsAwantAtoAsell.A-ACORRECTAANSWERS-
D.AtheApriceAisAsuchAthatAtheAamountAconsumersAwantAtoAbuyAequalsAtheAamountAproduce
rsAwantAtoAsell.
WhichAoneAofAtheAfollowingAwouldAnotAoccurAifAtheAmarketApriceAwasAaboveAtheAmarket-
clearingAprice?
A.AProducersAwouldAwantAtoAproduceAandAsellAmoreAthanAconsumersAwouldAwantAtoAbuy.
B.AThereAwouldAbeAaAsurplus.
C.AConsumersAwouldAbidAupAtheAprice.
D.AProducersAwouldAbeginAtoAlowerAtheirApricesAtoAsellAoffAexcessAinventory.A-
ACORRECTAANSWERS-C.AConsumersAwouldAbidAupAtheAprice.

A
Aproduct'sApriceAandAtheAquantityAconsumedAbothAincreasedAfromAoneAyearAtoAtheAnext.AW

hichAofAtheAfollowingAcouldAhaveAhappened?
A.ADemandAdecreasedAandAsupplyAremainedAconstant.
B.ASupplyAincreasedAandAdemandAremainedAconstant.
C.ASupplyAdecreasedAandAdemandAremainedAconstant.
D.ADemandAincreasedAandAsupplyAremainedAconstant.A-ACORRECTAANSWERS-
D.ADemandAincreasedAandAsupplyAremainedAconstant.
SteelAandAaluminumAareAsubstitutes.AIfAtheApriceAofAsteel
Aincreases,AotherAthingsAremainingAthe

Asame,AweAwouldAexpectAtheApriceAofAaluminumAtoA____________AandAtheAequilibriumAqu

antityAofAaluminumAtoA_______________A-ACORRECTAANSWERS-increase;Aincrease
EvenAthoughAtheAannualAconsumptionAofAcopperAisAnowAaboutA100AtimesAgreaterAthanAitAw
asAin
A1880,AtheArealApriceAof AcopperAhasAremainedArelativelyAunchanged.AWhichAofAtheAfollowin

gAhelpAaccountAforAthisApattern?
A.ANewAdepositsAthatAwereAcheaperAtoAmineAwereAdiscovered.
B.ADemandAforAcopperAgrewAdramatically.
C.AMoreAefficientAtechnologiesAreducedAproductionAcosts.
D.AAllAofAtheAabove.A-ACORRECTAANSWERS-D.AAllAofAtheAabove.
AreAtheAfollowingAstatementsAtrueAorAfalse?AExplainAyourAanswers.

a)ATheAelasticityAofAdemandAisAtheAsameAasAtheAslopeAofAtheAdemandAcurve.
ThisAstatementAis
A.AfalseAbecauseAtheApriceAelasticityAofAdemandAequalsAtheAslopeAofAtheAdemandAcurveAm
ultipliedAbyApriceAdividedAbyAquantity.
B.AfalseAbecauseAtheApriceAelasticityAofAdemandAchangesAalongAtheAdemandAcurve.
C.AfalseAbecauseAtheApriceAelasticityAofAdemandAisApositiveAandAtheAslopeAofAtheAdemandA
curveAisAnegative.
D.AtrueAbecauseAtheApriceAelasticityAofAdemandAequalsAtheAslopeAofAtheAdemandAcurve.
E.AbothAAAandABAareAcorrect.

b)ATheAcross-priceAelasticityAwillAalwaysAbeApositive.