HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
HI5003 Economics for Business
Lecture Week 2
Interactive Tutorial Week 3
Multiple Choice Practice Questions
1. What will happen in the rice market now if buyers expect higher rice prices in the near future?
a. the demand for rice will increase.
b. The demand for rice will decrease.
c. The demand for rice will be unaffected.
d. The supply of rice will increase.
2. Which of the following events would cause a movement upward and to the right along the
supply curve for tomatoes?
a. The number of sellers of tomatoes increases.
b. There is an advance in technology that reduces the cost of producing tomatoes.
c. The price of fertilizer decreases, and fertilizer is an input in the production of tomatoes.
d. The price of tomatoes rise.
3. If a surplus exists in a market, then we know that the actual price is
a. Above the equilibrium price and quantity supplied is greater than quantity demand
b. Above the equilibrium price and quantity demanded is greater than quantity supplied.
c. Below the equilibrium price and quantity demanded is greater than quantity supplied.
d. Below the equilibrium price and quantity supplied is greater than quantity demanded.
4. The law of demand states that:
a. price and quantity demanded are inversely related.
b. the larger the number of buyers in a market, the lower the product price.
c. price and quantity demanded are directly related.
d. Consumers will buy more of a given product at high prices than they will at low prices.
5. Which of the following would not shift the demand curve for beef?
a. A widely publicised study that indicates beef increases one’s cholesterol.
b. A reduction in the price of cattle feed.
c. An effective advertising campaign by pork producers
d. A change in the income of beef consumers.
6. If X is a normal good, a rise in money income will shift the:
a. Supply curve for X to the left.
b. Supply curve for X to the right.
c. Demand curve for X to the left.
d. Demand curve for X to the right.
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HI5003 Economics for Business -2021 T1 Interactive Tutorial
7. Refer to the table and answer the questions below
Quantity demanded
Price Aaron Angela Austin Alyssa
$0.00 20 16 4 8
$0.50 18 12 6 6
$1.00 14 10 2 5
$1.50 12 8 0 4
$2.00 6 6 0 2
$2.50 0 4 0 0
(i) Whose demand does not obey the law of demand?
(ii) If these are the only four buyers in the market, then the market quantity demanded at a price
of $1 is:
(iii) If these are the only four buyers in the market, then when the price increases from $1.00 to
$1.50, the market quantity demanded decreases by.
8. A higher price for batteries would result in a(n)
a. increase in the demand for flashlights.
b. decrease in the demand for flashlights.
c. increase in the demand for batteries.
d. decrease in the demand for batteries.
9. What will happen in the rice market now if buyers expect higher rice prices in the near future?
a. the demand for rice will increase.
b. The demand for rice will decrease.
c. The demand for rice will be unaffected.
d. The supply of rice will increase.
10. Which of the following events would cause a movement upward and to the right along the
supply curve for tomatoes?
a. The number of sellers of tomatoes increases.
b. There is an advance in technology that reduces the cost of producing tomatoes.
c. The price of fertilizer decreases, and fertilizer is an input in the production of tomatoes.
d. The price of tomatoes rise
11. If a surplus exists in a market, then we know that the actual price is
a. Above the equilibrium price and quantity supplied is greater than quantity demanded.
b. Above the equilibrium price and quantity demanded is greater than quantity supplied.
c. Below the equilibrium price and quantity demanded is greater than quantity supplied.
d. Below the equilibrium price and quantity supplied is greater than quantity demanded.
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HI5003 Economics for Business -2021 T1 Interactive Tutorial
12. A country club only allows members to purchase tickets for its celebrity golf tournament. The
demand and supply schedules are as follows:
Price Quantity Quantity Supplied
Demanded by
Members
$10 1000 600
$15 800 600
$20 600 600
$25 400 600
$30 200 600
Use a demand and supply model to answer the following questions below.
a. What is golf tournament the equilibrium price and quantity?
b. If this year's celebrity golf tournament and the country club sets the ticket price at $30,
what happens in the market?
c. If this year's celebrity golf tournament and the country club sets the ticket price at $10,
what happens in the market?
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HI5003 Economics for Business -2021 T1 Interactive Tutorial