Managerial Economics

Supply and Demand

Multiple-Choice Questions

1) The "law" of demand can be best described by A) people will buy things that they enjoy. B) if incomes rise, people will buy more. C) a rise in price will cause shortages. D) a fall in price will increase quantity demanded. 2) A movement along a demand curve may be caused by a change in: A) the non-price determinants of demand. B) the change in consumer expectations. C) the change in demand. D) the change in supply. 3) All of the following are non-price determinants of demand except? A) tastes and preferences B) income C) technology D) future expectations 4) Which of the following will result in a decrease in demand for residential housing? A) a decrease in the price of lumber B) an increase in the wages of carpenters C) a decrease in real household incomes D) an increase in the prices of residential housing 5) Which of the following would cause a decrease in the demand for fish? A) The price of red meat increases. C) The price of chicken decreases. B) The price of fish increases. D) The number of fishing boats decreases.

6) Two goods are ________ if the quantity consumed of one increases when the price of the other decreases. A) normal B) superior C) complementary D) substitute 7) Which of the following will not cause the demand curve for good X to shift? A) a change in the price of X B) a change in the price of Y, a complement C) a change in the price of Z, a substitute D) an increase in average disposable real income

Sample Questions

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8) All of the following are non-price determinants of supply except? A) costs B) technology C) income D) future expectations 9) Which of the following would cause a decrease in the quantity supplied of PC’s? A) The price of software decreases. B) The number of PC manufacturers decreases. C) The cost of manufacturing PCs decreases. D) None of the above answers is correct. 10) Which of the following will not cause a shift in the supply curve? A) a change in the number of...