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True False test
1.Market price of a product is always market equilibrium price (market clearing price).
2.
Increase in consumers’ incomes is an incentive for all the producers to raise output.
3.
If demand for a good is perfectly inelastic, a demand curve for that good is downward sloping.4.Demand for a given good depends on a price of that good, but does not depend on prices of other goods.
5.
When consumers’ incomes raise, share of expenditures for normal goods always increases.6.Drop in production cost results in shift of the supply curve to the right.7.When a good satisfies basic needs of a consumer and has no substitutes, demand for such a good is perfectly inelastic.
8.
Raise of price of a given good causes shift of a demand curve to the right.9.Market may go out of equilibrium when a change of non-price determinants of demand and/or supplytakes place.
10.
Market mechanism is a tendency to equate demand and supply through change of a price level.11.Relationship between supply of a given good and its price is positive.
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12.If a supply curve is vertical, supply does not depend on price.13.When market price of a good is higher than market clearing price, then there will be tendency for a price to fall.14.If income increases, there is a move up along the demand curve.
Choice test
1.
A shift in the demand curve for butter may not be caused by:a.drop in price of butter 
b.
raise in price of margarinec.increase of consumers’ incomesd.change in consumers’ preferences in relation to butter.2.The demand curve for coffee shifted to the right. This might be a result of:a.drop in price of coffee substitutes (for example tea) b.drop in price of complementary goods (for example sugar)
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c.decrease of consumers’ incomes (assuming that coffee is a normal good)d.drop in price of coffee.3.Location of a supply curve does not depend directly on:
a.
 prices of raw materials and semi-products used in production process b.technology of productionc.consumers’ incomesd.all the above factors influence location of the curve.4.The most important non-price determinants of supply are as follows:a.consumers’ incomes b.production costsc.profitability of substitutes’ productiond.all the above answers are true.
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