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Supply and Demand Quiz — 12th Grade Economics (With Answer Key)
Questions
Grade 12
English
Supply and Demand Quiz — 12th Grade Economics (With Answer Key)
Supply and Demand Assessment
1. Which of the following best describes the Law of Demand?
A. The demand for a good is determined solely by the number of consumers in the market.
B. A shift in the demand curve causes the price of a good to change.
C. As the price of a good increases, the quantity demanded increases.
D. As the price of a good increases, the quantity demanded decreases.
2. According to the Law of Supply, what is the typical response of producers to an increase in the market price of a product?
A. Producers will maintain the same level of production to avoid risks.
B. Producers will decrease the quantity supplied to maintain scarcity.
C. Producers will exit the market because costs are too high.
D. Producers will increase the quantity supplied to maximize potential profit.
3. A local smartphone manufacturer lowers the price of its latest model by $100. Which of the following describes the impact on the market for that specific smartphone model?
A. A movement along the existing supply curve to a higher quantity supplied.
B. A leftward shift of the supply curve.
C. A movement along the existing demand curve to a higher quantity demanded.
D. A rightward shift of the demand curve.
4. If the price of coffee rises significantly due to a global shortage, how will this likely affect the market for tea, assuming tea is a substitute for coffee?
A. The demand for tea will shift to the left, decreasing both price and quantity.
B. The demand for tea will shift to the right, increasing both price and quantity.
C. The supply of tea will increase as producers try to capitalize on coffee drinkers.
D. There will be a movement along the tea demand curve as the price of tea falls.
5. When the current market price of a professional gaming console is set at $600, but the equilibrium price is $500, what market condition exists?
A. A surplus, because quantity supplied exceeds quantity demanded.
B. Price stability, because the government has likely set a price floor.
C. Market equilibrium, because all consumers who want a console can buy one.
D. A shortage, because quantity demanded exceeds quantity supplied.
6. If the market for electric bicycles is currently experiencing a shortage, which of the following is true?
A. The supply curve must have shifted to the right.
B. The current price is below the equilibrium price.
C. The current price is above the equilibrium price.
D. The quantity supplied is exactly equal to the quantity demanded.
7. Based on the graph above, if the market moves from the initial equilibrium at E1 to a new equilibrium at E2, which of the following has occurred?
A. Demand has decreased, leading to a lower price and lower quantity.
B. Demand has increased, leading to a higher price and higher quantity.
C. Supply has decreased, leading to a higher price and lower quantity.
D. Supply has increased, leading to a lower price and higher quantity.
8. Which of the following scenarios describes a determinant of supply that would cause the supply curve for commercial aircraft to shift to the left?
A. A major airline announces it will purchase 500 new planes next year.
B. The federal government provides a new subsidy to aircraft manufacturers.
C. A breakthrough in carbon-fiber technology reduces manufacturing time.
D. The price of high-grade aluminum, a key production input, increases sharply.
9. Market Scenario: Natural Disaster
A severe hurricane makes landfall in Florida, destroying 40% of the state's orange groves.
- Explain what happens to the supply, equilibrium price, and equilibrium quantity in the market for orange juice.
- Describe how this would look on a supply and demand graph.
10. Policy Analysis: Price Ceilings
Explain why a government-mandated price ceiling set below the equilibrium price inevitably results in a persistent shortage. In your answer, provide one real-world example of a market where this has occurred.