1. Directions

You will read passages on the topic and then answer questions about them. You may find vocabulary at the end of the test. Read the questions carefully before choosing the correct answers.

2. Questions of the test

Question 1. Which of the following factors influences the supply of a product?
A) Consumer income
B) Consumer preferences
C) The cost of production
D) The availability of substitutes

Question 2. When consumer income increases, which of the following tends to occur?
A) The demand for products tends to decrease
B) The supply of products tends to increase
C) The demand for products tends to increase
D) The supply of products tends to decrease

Question 3. What is market equilibrium?
A) When the quantity of a product that is supplied is greater than the quantity of the product that is demanded
B) When the quantity of a product that is supplied is equal to the quantity of the product that is demanded
C) When the quantity of a product that is supplied is less than the quantity of the product that is demanded
D) When the price of a product is stable

Question 4. If there is an excess supply of a product, which of the following tends to occur?
A) The price of the product tends to increase
B) The price of the product tends to decrease
C) The demand for the product tends to increase
D) The demand for the product tends to decrease

Question 5. If there is an excess demand for a product, which of the following tends to occur?
A) The price of the product tends to increase
B) The price of the product tends to decrease
C) The demand for the product tends to increase
D) The demand for the product tends to decrease