Demand and Supply Analysis Quiz

What is the meaning of market equilibrium?

• A state where demand and supply are equal

• A state where supply is higher than demand

• A state where demand and supply are irrelevant

• A state where demand is higher than supply

What happens if the price in the market is higher than the equilibrium price?

• No effect on demand or supply

• Excess demand

• Excess supply

• Market equilibrium

What is the result of an increase in demand for a product?

• Rise in price and extension in supply

• Fall in price and contraction in supply

• Rise in price and contraction in supply

• Fall in price and extension in supply

What happens when there is a decrease in supply of a product?

• Rise in price and extension in demand

• Fall in price and extension in demand

• Rise in price and contraction in demand

• Fall in price and contraction in demand

What is the effect of an increase in incomes on the demand for cars?

• Shifts the demand curve to the right

• No effect on the demand curve

• Shifts the demand curve to the left

• Shifts the supply curve to the right

What is the effect of an improvement in technology on the cost of producing cars?

• Shifts the demand curve to the left

• Shifts the demand curve to the right

• Shifts the supply curve to the left

• Shifts the supply curve to the right

What happens to equilibrium price and quantity when both demand and supply curves shift to the right?

• Equilibrium price falls and quantity decreases

• Equilibrium price rises and quantity increases

• Equilibrium price falls and quantity increases

• Equilibrium price rises and quantity decreases

What is the function of price in resource allocation?

• Transmission of preferences

• All of the above

• Provision of incentives

• Signalling

What is the term for a situation of excess supply or excess demand?

• Market fluctuation

• Market stability

• Market disequilibrium

• Market equilibrium

What is the relationship between different markets where one product complements another?

• Joint supply

• Derived demand

• Alternative demand

• Joint demand