Understanding Microeconomics: Demand and Supply Quiz

What does the law of demand state?

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

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

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

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

What is the primary factor that causes a movement along the demand curve?

• Changes in consumer income

• Changes in the price of the good itself

• Changes in the prices of related goods

• Changes in consumer tastes and preferences

Which of the following would cause a shift in the demand curve for ice cream?

• A change in the price of ice cream

• A change in the price of frozen yogurt, a substitute for ice cream

• A movement along the demand curve due to a price change

• None of the above

What does the law of supply state?

• 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 the primary factor that causes a movement along the supply curve?

• Changes in technology

• Changes in the number of suppliers

• Changes in the price of the good itself

• Changes in government policy

Which of the following would cause a shift in the supply curve for smartphones?

• A decrease in the price of smartphones

• An improvement in technology used to produce smartphones

• A movement along the supply curve due to a price change

• None of the above

If the price of coffee increases, what happens to the demand for tea, assuming tea is a substitute for coffee?

• The demand for tea decreases.

• The demand for tea increases.

• The demand for tea remains unchanged.

• The demand for tea shifts to the left.

What happens to the supply of a good if the government imposes a tax on it?

• The supply increases.

• The supply decreases.

• The supply remains unchanged.

• The supply becomes perfectly elastic.

If consumers expect the price of a good to rise in the future, what happens to the current demand for the good?

• It decreases.

• It increases.

• It remains unchanged.

• It becomes perfectly inelastic.

What effect does an increase in consumers' income have on the demand for a normal good?

• Demand decreases.

• Demand increases.

• Demand remains unchanged.

• Demand becomes perfectly elastic.