Demand and Supply — Agriculture Economics Reviewer Questions
1,000 board-style Demand and Supply items for the Agriculturist Licensure Examination. Try 10 questions free; lifetime access is ₱59. Fixed versus variable, average versus marginal, and cost versus return are the distinctions most items are built on. Get those clean first.
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Sample Demand and Supply questions with answers and explanations
Board-style items taken from the Agriculture Economics bank. Every answer is explained, which is the part that makes a review question worth doing twice.
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Which statement best states the law of demand for palay, other factors held constant?
- A. A higher price reduces quantity demanded. correct
- B. A higher price increases quantity demanded.
- C. Income alone fixes quantity demanded.
- D. Quantity demanded is unrelated to price.
Why: The law of demand states that price and quantity demanded move inversely, ceteris paribus.
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In Bukidnon, the price of palay falls and buyers purchase more, with income and tastes unchanged. How should this be described?
- A. An increase in demand
- B. An increase in quantity demanded correct
- C. A decrease in demand
- D. A decrease in quantity demanded
Why: A change caused only by the good’s own price is movement along the demand curve, called a change in quantity demanded.
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For a palay market, Qd = 80 − 2P and Qs = 8 + 1P. What is the equilibrium quantity?
- A. 37
- B. 27
- C. 32 correct
- D. 24
Why: Set Qd = Qs: 80 − 2P = 8 + 1P. Thus P = 24 and Q = 32.
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Initial demand is Qd=100−2P and supply is Qs=10+1P. Demand then becomes Qd=112−2P. Which equilibrium comparison is correct?
- A. Price falls from 30 to 34.
- B. Price stays at 30.
- C. Price rises from 34 to 46.
- D. Price rises from 30 to 34. correct
Why: Equating each demand equation with supply gives P0=30 and P1=34; the rightward demand shift raises equilibrium price.
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A drought causes a temporary palay shortage. Which policy is most likely to improve access without suppressing the price signal needed to attract supply?
- A. Targeted cash or food assistance to vulnerable households correct
- B. A universal ceiling far below equilibrium
- C. Mandatory destruction of private stocks
- D. A prohibition on interregional shipments
Why: Targeted assistance protects vulnerable consumers while retaining price incentives for conservation and added supply.
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Which survey design would best estimate household demand for palay across income groups?
- A. Interview only buyers at one premium store and omit income.
- B. Use a stratified probability sample, record quantities, prices and incomes, and pretest standardized questions. correct
- C. Ask volunteers one yes/no question after a price shock.
- D. Select only the largest households and infer all quantities.
Why: Stratification improves representation, while standardized, pretested measures capture the key demand variables.
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Which statement best states the law of supply for corn, other factors held constant?
- A. A higher price decreases quantity supplied.
- B. Supply is fixed by consumer income.
- C. A higher price increases quantity supplied. correct
- D. Price never affects planned sales.
Why: The law of supply describes a direct relation between price and quantity supplied, ceteris paribus.
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A new harvesting technology lowers the unit cost of producing corn in Bohol. What happens to market supply?
- A. The supply curve shifts left.
- B. There is only movement up the curve.
- C. Quantity supplied falls at every price.
- D. The supply curve shifts right. correct
Why: Lower production cost raises the amount sellers offer at each price, shifting supply right.
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