Name __________________________________________________ Date ______________________________

Assessment: Demand and Supply

Mastering the Content
1. The law of demand states that as quantity demanded decreases
A. wages decrease.
B. production increases.
C. price increases.
D. quality decreases.
2. In the summer picnic season, a sharp rise in the price of burgers may lead to an increase in demand for
A. buns.
B. relish.
C. chicken.
D. coleslaw.
3. Quantity demanded moves along the demand curve in response to changes in
A. price.
B. income.
C. preferences.
D. expectations.
4. Which of these is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at
home?
A. The demand curve shifts to the left.
B. The demand curve becomes flatter.
C. The demand curve shifts to the right.
D. The demand curve becomes steeper.
5. Supply depends on the willingness and ability of
A. donors to contribute.
B. producers to produce.
C. advertisers to promote.
D. consumers to purchase.
6. According to the law of supply, what happens as price increases?
A. The quantity supplied increases.
B. The quantity supplied decreases.
C. The supply curve shifts to the left.
D. The supply curve shifts to the right.

7. Which of these would most likely increase the supply of soccer balls?
A. a transportation strike
B. a government excise tax
C. a decrease in the price of raw materials
D. an increase in the supply of tennis balls
8. The degree to which the quantity demanded responds to changes in price is called
A. elasticity.
B. revenue.
C. schedule.
D. utility.
9. Which of these is most likely to quickly become available in larger quantities as a result of a price increase
A. airline service
B. babysitters
C. medical doctors
D. midsize cars
10. Which of these is the best example of diminishing marginal utility?
A. A shortage of bike paths makes bicycles less useful.
B. Bicycles become less useful as they get old and start to rust.
C. Someone who has one bicycle will have less use for another.
D. People with cars have less use for bicycles than people without cars have.

Exploring the Essential Question

What are demand and supply, and what factors influence them?
Suppose a toy production company has introduced a new electronic toy called the Gizmo. The marketing
department produced the revenue table for the product. Examine the table, and answer the questions that follow.

11. The company first marketed Gizmos at a price of $20.00 apiece. How many Gizmos did the company sell per week at
this price? What total revenue did the company make per week at this price?
12. Sketch a line graph to represent the demand for Gizmos. Be sure to indicate the scale and units on the x- and y-axes.
13. Explain why the marketing department ran a total revenue test and produced the revenue table above.
14. Make a recommendation to the company based on the revenue table. Write a paragraph supporting your
recommendation. Use the word elastic or inelastic in your response, and include a calculation of demand elasticity.