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AP Macroeconomics Demand, Supply, and Equilibrium — practice questions

Explore 6 free Demand, Supply, and Equilibrium questions in AP Macroeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Demand, Supply, and Equilibrium questions and exercises with answers

Showing questions 1–6 of 6.

A product whose demand rises when income rises, and falls when income falls, is given what name for this kind of good?Read the answer and worked solution →A product whose demand falls when income rises, and rises when income falls, is given what name for this kind of good?Read the answer and worked solution →Golf clubs and golf balls are complements. If the price of golf clubs rises, what happens to the demand curve for golf balls?Read the answer and worked solution →What hourly rate was the federal minimum wage set at, at the end of 2014?Read the answer and worked solution →What is the loss in total surplus that occurs when an economy produces at an inefficient quantity, such as a quantity forced by a price control, called?Read the answer and worked solution →Pick the bigger quantity at each priceRead the answer and worked solution →

Worked practice questions

A product whose demand rises when income rises, and falls when income falls, is given what name for this kind of good?

  1. An inferior good
  2. A normal good
  3. A substitute good
  4. A complement good
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Correct answer: B. A normal good

1. The definition ties demand directly to the direction of the income change. 2. When demand and income move in the same direction, the good is normal. 3. This is true for most goods and services, not just a special few. 4. Substitutes and complements describe relationships between two different goods, not a good's relationship to income. _Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_

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A product whose demand falls when income rises, and rises when income falls, is given what name for this kind of good?

  1. A normal good
  2. A substitute good
  3. An inferior good
  4. A complement good
Show answer and solution

Correct answer: C. An inferior good

1. The definition ties demand directly to the direction of the income change. 2. When demand and income move in opposite directions, the good is inferior. 3. Generic groceries and used cars are examples where richer consumers buy relatively less. 4. Substitutes and complements describe relationships between two different goods, not a good's relationship to income. _Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_

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Golf clubs and golf balls are complements. If the price of golf clubs rises, what happens to the demand curve for golf balls?

  1. It shifts to the right
  2. It does not shift at all
  3. It shifts to the left
  4. It becomes perfectly horizontal
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Correct answer: C. It shifts to the left

1. A higher price of golf clubs moves buyers along the golf club demand curve to a lower quantity demanded of clubs. 2. Because clubs and balls are used together, fewer clubs bought means less desire for balls at every price. 3. That lower quantity demanded of balls at every price is a leftward shift of the ball demand curve. 4. This is a shift caused by a related good's price, not a movement along the ball demand curve itself. _Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_

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More Economics topics

InflationMoney and BankingMeasuring Economic OutputUnemploymentMonetary Policy and Bank RegulationExchange Rates and International Capital FlowsGovernment Budgets and Fiscal PolicyAggregate Demand and Aggregate Supply