The Dynamics of Supply and Demand

What is the law of demand?

• As the price of a good increases, the quantity demanded decreases.

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity supplied decreases.

• As the price of a good decreases, the quantity demanded remains unchanged.

Which of the following factors can cause a shift in the demand curve for a product?

• A change in the price of the product.

• A change in consumer income.

• A change in the price of a substitute good.

• Both B and C are correct.

What is the law of supply?

• As the price of a good increases, the quantity supplied decreases.

• As the price of a good decreases, the quantity supplied increases.

• As the price of a good increases, the quantity supplied increases.

• As the price of a good decreases, the quantity supplied remains unchanged.

What is a surplus in the context of supply and demand?

• A situation where quantity demanded is greater than quantity supplied.

• A situation where quantity supplied is greater than quantity demanded.

• A situation where quantity demanded equals quantity supplied.

• A situation where the market is in a state of disequilibrium.

What is an equilibrium price?

• The price at which the quantity of a good demanded by consumers is equal to the quantity supplied by producers.

• The highest price a consumer is willing to pay for a good.

• The lowest price a producer is willing to accept for a good.

• The price set by the government for a good.

What happens to the equilibrium price when there is an increase in demand, assuming supply remains constant?

• It decreases.

• It increases.

• It remains unchanged.

• It becomes volatile.

If two goods are complements, what would likely happen to the demand for one good if the price of the other good increases?

• The demand for the first good would increase.

• The demand for the first good would decrease.

• The demand for the first good would remain unchanged.

• The demand for the first good would become unpredictable.

What is meant by "price elasticity of demand"?

• The responsiveness of demand to a change in income.

• The responsiveness of demand to a change in the price of a substitute.

• The responsiveness of demand to a change in the price of the good itself.

• The responsiveness of supply to a change in the price of the good.

Which of the following would be considered a non-price determinant of supply?

• Consumer preferences.

• Technology.

• The price of the good.

• The number of consumers in the market.

In the context of supply and demand, what is a "market"?

• A physical place where goods are sold.

• An abstract concept that encompasses the buyers and sellers of a particular good or service.

• Only the supply side of the economic transaction.

• Only the demand side of the economic transaction.