Mechanism of Supply & Demand Questions and Answers 2025

Mechanism of Supply & Demand
Questions and Answers 2025

1.ATheAmechanismAofAsupplyAandAdemandAis
a.AaAfundamentalAtoolAinAbothAmicroeconomicsAandAmacroeconomics.
b.AtheAonlyArealA"law"AofAeconomics.
c.AaAfundamentalAtoolAonlyAinAmicroeconomics.
d.AaAfundamentalAtoolAonlyAinAmacroeconomics.A-ACORRECTAANSWERS-a
2.AWhenAusedAinAaAprofessionalAorAtechnicalAsense,AtheAlawAofAsupplyAandAdemandArefers
Ato

a.AsomeAvagueAinfluencesAonAeconomicAaffairs.
b.AtheAfactAthatApricesAgoAupAwhenAcommoditiesAareAscarce.
c.AtheAmarketAforcesAthatAshowAhowApricesAandAquantitiesAareAdetermined.
d.AtheAcontrolsAthatAregulateAtheAamountAofAscarceAgoodsAthatAeachAconsumerAcanApurch
ase.A-ACORRECTAANSWERS-c
3.ADuringAtheAAmericanARevolution,AtheAPennsylvaniaAlegislatureAenactedApriceAcontrolsA
onAessentialAcommodities.ATheAresultAofAthisAlegislationAwas
a.AaAlargeAincreaseAinAtheAavailabilityAofAthoseAitems,AendingAshortages.
b.AaAsevereAshortageAofAthoseAessentialAcommodities.
c.AanAincreaseAinAtheApriceAofAthoseAitems,AthusAalleviatingAshortages.
d.AnewAeffortsAtoAincreaseAproductionAofAthoseAcommodities.
e.AaAminorAinconvenienceAasApersonsAadjustedAtoAtheAnewAlaw.A-ACORRECTAANSWERS-
b
4.AAAdemandAscheduleAisAaAtableAshowingAhowAtheA____AofAsomeAproductAduringAaAspecifi
edAperiodAofAtimeAchangesAasA____Achanges,AholdingAallAotherAdeterminantsAofAquantityAd
emandedAconstant.
a.Ademand;AtheApriceAofAitsAcomplement
b.Ademand;AtheAquantityAsupplied
c.AquantityAdemanded;AtheApriceAofAitsAsubstitute
d.AquantityAdemanded;AtheApriceAofAthatAproductA-ACORRECTAANSWERS-d
5.ATheAslopeAofAaAdemandAcurveAisAalmostAalways
a.Apositive,AbecauseAwhenApeopleAbuyAmoreAofAaAgoodAtheAcostAofAproducingAitAwillArise.
b.Apositive,AbecauseAtheAmoreAmoneyAaApersonAhas,AtheAmoreAofAaAparticularAgoodAwillAbe
Abought.

c.Anegative,AbecauseAwhenApeopleAbuyAmoreAofAaAgoodAtheAcostAofAproducingAitAwillAfall.
d.Anegative,AbecauseAwithAeverythingAelseAequal,AtheAsameApeopleAwillAbuyAmoreAofAaAgoo
dAwhenAitsApriceAisAlower.
e.Apositive,AbecauseAasAtheApriceArises,ApeopleAwantAtoAsellAmoreAofAtheAgood.A-
ACORRECTAANSWERS-d

, 6.AInAanAattemptAtoAforecastAenrollment,AaAmajorAuniversityAhiredAanAeconomistAtoAgiveAaA"
headAcount."AOneAvariableAwhichAsheAwouldAprobablyAemphasizeAmoreAthanAanyAotherAinA
tryingAtoAforecastAthisAis
a.AhowAinterestedApeopleAareAinAattendingAcollege.
b.AtheAemploymentAopportunitiesAthatAcollegeAopensAup.
c.AsurveyAresultsAonApublicAinterestAinAeducation.
d.AherAinstinctAaboutAwhatAtheApublicAwants.
e.AtuitionA(theApriceAofAattending).A-ACORRECTAANSWERS-e
7.AIfApriceArises,AwhatAhappensAtoAdemandAforAaAproduct?
a.AItAincreases.
b.AItAdecreases.
c.AItAdoesAnotAchange.
d.AUncertain-economicAtheoryAhasAnoAanswerAtoAthisAquestion.A-ACORRECTAANSWERS-
c
8.AAnAimportantAassumptionAthatAisAmadeAwhenAconstructingAaAdemandAscheduleAisAthat
a.AonlyApriceAandAquantityAmatterAinAdeterminingAdemand.
b.ApeopleAalwaysAwantAaAcertainAamountAofAaAproduct.
c.AdemandAisAtooAimportantAtoAbeAleftAtoAtheAeconomists.
d.AallAotherAdeterminantsAofAdemandAareAheldAconstant.
e.AdemandAhasAaApositiveAslope.A-ACORRECTAANSWERS-d
9.AFirmsAoftenAseekAtoAborrowAmoneyAtoAexpandAtheirAcapitalAstock,AandAtheApriceAtheyApa
yAforAthatAmoneyAisAtheAinterestArate.AWhatAhappensAtoAquantityAofAmoneyAdemandedAifAth
eAinterestArateAincreases?
a.AItAincreases.
b.AItAdecreases.
c.AItAdoesAnotAchange.
d.AUncertain-theAlawAofAdemandAdoesAnotAapplyAtoAmoney.A-ACORRECTAANSWERS-b
10.AWhichAofAtheAfollowingAwillAshiftAtheAdemandAcurveAforAmilk?
a.AchangeAinAtheAincomeAofAbuyersAofAmilk
b.AchangeAinAtheApriceAofAmilk
c.AchangeAinAinputApricesAforAmilk
d.AAllAofAtheAaboveAareAcorrect.A-ACORRECTAANSWERS-a
11.ASugarcaneAcanAbeAusedAforAproducingAbothAsugarAandAethanol.ANewAregulationsAinAce
rtainAcountriesAnowAallowAaAhigherAlevelAofAethanolAinAgasoline.AAnAeconomistAwouldAexpe
ctAsugarcaneApricesAtoA____,AandAquantityAsoldAtoA____.
a.Arise;Arise.
b.Afall;Afall.
c.Arise;Afall.
d.Afall;AremainAtheAsame.A-ACORRECTAANSWERS-a
12.AAlongAaAsupplyAcurve,
a.AsupplyAchangesAasApriceAchanges.
b.AquantityAsuppliedAchangesAasApriceAchanges.
c.AsupplyAchangesAasAtechnologyAchanges.
d.AquantityAsuppliedAchangesAasAtechnologyAchanges.A-ACORRECTAANSWERS-b
13.AAnAupward-slopingAsupplyAcurveAshowsAthat
a.AbuyersAareAwillingAtoApayAmoreAforAaAscarceAproduct.