End of Chapter Assessment

Chapter 2: Demand and Supply

Part I. True or False: Write TRUE beside the number if the statement is correct. Otherwise, write FALSE.

_________________1. Quantity demand is the amount that buyers are willing or able to purchase.

_________________2. Expectations, population (number), tastes, and preferences are determinants of both demand
and supply.

_________________3. The higher the income, the lower the demand will be for normal goods.

_________________4. Under QD, complements are evident where an increase in the price of one leads to a decrease
in the supply of the other

_________________5. Input prices require that there are raw materials used to create the commodity.

_________________6. Taxes and subsidies are the only ways that the government may intervene in the demand for
goods or services.

_________________7. Technology always increases quantity supplied.

_________________8. An increase in government intervention always shifts the supply curve to the left.

_________________9. Substitutes will result in the demand curve shifting to the right when the price of one product
is increased.

_________________10. Natural calamities are determinants of quantity demanded.

Part II. Multiple Choice: Encircle the letter of the correct answer.

1 The relationship between the price and quantity demand is:

. A. Indirect
B. Negative
C. Obtuse
D. Inverse

2 QS and QD meet at the:

. A. Market
B. Equilibrium
C. Saturation point
D. Utility

3 The result of supply being greater than demand is:

. A. Surplus
B. Shortage
C. Positive
D. Equilibrium

4 Ceteris paribus means:

. A. Naturally or generally
B. All price and quantity are the same
C. No other variables/factors
D. All things equal

5 The table that shows the relationship between price and quantity demanded is:
. A. Demand curve
B. Demand table
C. Demand schedule
D. Demand graph