Which of the following statements about the decrease in demand shown in the graph is correct?

Get unstuck with a CliffsNotes subscription

Unlock every step-by-step explanation, download literature note PDFs, plus more.Get Access

Answer the following questions and then press 'Submit' to get your score.

Question 1

The supply and demand model applies when three of the following four conditions are met. Which condition is not required?

a) There must be many buyers.

b) There must be many sellers.

c) The buyers and sellers must trade an identical item.

d) The item traded must be a product.

Question 2

Which of the following predictions is not made by the supply and demand model?

a) If there is excess demand, the price will rise.

b) If there is excess supply, the price will fall.

c) If there is no excess demand or excess supply, the market will be in equilibrium.

d) A market which is out of equilibrium will always move rapidly to the equilibrium,

Question 3

Suppose there is excess supply in a market and the price decreases. Which of the following combinations of events will occur?

a) There will be a fall in quantity supplied and a rise in quantity demanded.

b) There will be a fall in quantity supplied and a rise in demand.

c) There will be a fall in supply and a rise in quantity demanded.

d) There will be a fall in supply and a rise in demand.

Question 4

Suppose there is a decrease in supply in a market where the supply curve slopes upwards and the demand curve slopes downwards. Which of the following would not occur?

a) An excess supply.

b) A fall in price.

c) A fall in supply.

d) A fall in the equilibrium level of expenditure.

Question 5

Suppose a market is in equilibrium, and then the demand increases. Which of the following would be shown on a graph that illustrated the effects?

a) An excess demand at the initial equilibrium price.

b) An excess demand at the new equilibrium price.

c) An excess supply at the initial equilibrium price.

d) An excess supply at the new equilibrium price.

Question 6

Suppose there is an increase in demand in a market where the supply curve slopes upwards and the demand curve slopes downwards. Which of the following might not occur?

a) An excess supply.

b) A fall in price.

c) A rise in the quantity traded.

d) A fall in the equilibrium level of expenditure.

Question 7

Which of the following might not lead to an increase in the demand for a product that can be stored?

a) A fall in the price of a complement.

b) A rise in consumer incomes.

c) An increase in the number of buyers.

d) An expected rise in price.

Question 8

Which of the following might not lead to a decrease in the demand for a type of labour?

a) A decrease in the number of firms using the labour.

b) An increase in the productivity of the labour.

c) A fall in the price of a substitute input.

d) A decrease in the demand for the produce or products which the labour is used to produce.

Question 9

Which of the following would not lead to a decrease in the supply of a product that can be stored?

a) An increase in the demand for a joint product.

b) A rise in the price of another input.

c) A decrease in the number of firms supplying the product.

d) An expected rise in the price of the product.

Question 10

Which of the following could not lead to an increase in price combined with an increase in the quantity traded?

a) An increase in demand combined with unchanged supply.

b) An increase in demand combined with a decrease in supply.

c) A decrease in demand combined with an increase in supply.

d) An increase in demand combined with an increase in supply.

Which of the following statements is correct if demand increases and supply decreases?

Which of the following statement about demand is correct?

Which of the following is true when supply decreases and demand decreases?

What will happen as a result of a decrease in demand quizlet?