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Supply and Demand

Supply and Demand Answer Key

1. 
According to the law of demand, when prices increase, demand will decrease.
  1. True
  2. False
2. 
The desire to own something and the ability to pay for it.
  1. supply
  2. demand
  3. income
  4. payment
3. 
Given the following information create a market demand schedule:

Price of candy: $.50
Quantity oat this price: 200

There should be at least 3 additional prices and quantities.
4. 
What does elasticity of demand measure?
  1. a decrease in the quantity demanded
  2. an increase in the quantity available
  3. how buyers will cut back or increase their demand when price rises or falls
  4. the amount of time consumers need to change their demand for a good
5. 
What does supply refer to?
  1. amount of goods sold
  2. amount of good that is produced
  3. human desire
  4. noe of the above
6. 
The following is an example of a ____________________.

Price quantity
$.50 100
$1.00 150
$1.50 200
$2.00 250
  1. supply schedule
  2. market demand schedule
  3. market supply schedule
  4. demand schedule
7. 
Supply is the desire and ability to produce and sell a product.
8. 
You go to the store to buy bread and there is not enough bread for all those who want to purchase it, what is this an example of?
  1. excess supply
  2. excess equilibrium
  3. shortage
  4. surplus
9. 
The point where the demand curve and the supply curve intersect is called the point of:
  1. disequilibrium
  2. excess supply
  3. excess demand
  4. equilibrium
10. 
Draw a sample supply and demand on the graph below and circle the equilibrium point. (Make sure you label each curve!)
Graph 20x20 Quadrant 1