Economics Quiz: Demand and Supply
Instructions
Please read each question carefully and select the correct answer from the choices provided.
-
What is the Law of Demand?
- A. As the price of a good decreases, the quantity demanded increases.
- B. As the income of consumers increases, the demand for inferior goods increases.
- C. The quantity demanded of a good is not related to its price.
- D. Demand is always constant regardless of price changes.
-
Which of the following factors can cause a shift in the demand curve?
- A. Change in the price of the good.
- B. Change in consumer incomes.
- C. Change in the quantity supplied.
- D. Change in the level of technology.
-
What does the term 'equilibrium price' refer to?
- A. The highest price that consumers are willing to pay.
- B. The price at which the quantity supplied equals the quantity demanded.
- C. The average price of a good over time.
- D. The price at which producers make the most profit.
-
If the price of a substitute good rises, what is likely to happen to the demand for the original good?
- A. Demand for the original good decreases.
- B. Demand for the original good remains unchanged.
- C. Demand for the original good increases.
- D. Demand for the original good becomes inelastic.
-
What is the Law of Supply?
- A. As the price of a good decreases, the quantity supplied increases.
- B. As the price of a good increases, the quantity supplied increases.
- C. Supply is not affected by changes in price.
- D. There is always excess supply in the market.
-
Which of the following would likely cause a rightward shift in the supply curve?
- A. An increase in production costs.
- B. A decrease in the number of suppliers.
- C. A technological advancement that improves production efficiency.
- D. An increase in consumer income.
-
What effect does a market surplus have on price?
- A. Prices tend to rise until equilibrium is achieved.
- B. Prices tend to fall until equilibrium is achieved.
- C. Prices remain stable regardless of surplus conditions.
- D. Prices are irrelevant to surplus conditions.
-
Which of the following is NOT a determinant of demand?
- A. Consumer preferences.
- B. Price of related goods.
- C. Production technology.
- D. Consumer income.
-
What characteristics define a perfectly competitive market?
- A. Many buyers and sellers, free entry and exit, and identical products.
- B. A single seller and many buyers.
- C. Differentiated products and high barriers to entry.
- D. Few sellers controlling a large portion of the market.
-
If a government imposes a price ceiling on a product, what is the likely outcome?
- A. Increased supply and decreased demand.
- B. A decrease in the quantity supplied leading to a shortage.
- C. The elimination of consumer surplus.
- D. Increased prices for consumers.
Please select your answers carefully, as each question has one correct response. Good luck!