Economics Quiz

When a consumer is able and willing to buy a good or service, he or she creates which of the following:

• Consumption

• Demand

• Elasticity

• Allocation

What are inferior goods?

• Goods for which demand decreases as consumer income increases
• Goods that are only available in certain countries
• Goods that are always of low quality
• Goods for which demand increases as consumer income increases

How is future prices related to current demand?

• If the price is expected to rise, current demand will rise

• If the price is expected to fall, current demand will rise

• If the price is expected to rise, current demand will rise

• Future price is not related to current demand

What does it mean when the demand for a product is inelastic?

• A price increase does not have significant impact on buying habits

• The quantity demanded decreases as the price decreases
• The quantity demanded remains constant regardless of changes in income
• The quantity demanded increases as the price increases

What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?

• Donate their goods to charity
• Sell their goods at a lower price
• Destroy their goods
• Store goods and wait to sell them at a higher price

Which of the following is the best example of the law of supply?

• A sandwich shop increases the number of sandwiches they supply every day when the price is increased

• A food producer increases the number of acres of wheat he grows to supply a milling company

• A catering company buys a new dishwasher to make their work easier

• A milling company builds a new factory to process flour to export

When the selling price of a good goes up, what is the relationship to the quantity supplied?

• The cost of production goes down

• The profit made on each item goes down

• It becomes practical to produce more goods

• There is no relationship between the two

What does elasticity of demand measure?

• The color of the product
• how much buyers will cut back or increase their demand when prices rise or fall

• The brand of the product
• The size of the product

What effect does the availability of many substitute goods have on the elasticity of demand for a good?

• demand is elastic

• demand is inelastic

• demand is unitary elastic

• the availability of substitutes does not have an effect

Purchasing a generic brand of a good when the name brand version goes up in price is known as ________.

• Elasticity
• substitution

• complementary

• luxury