Supply and Demand Quiz

What happens to the demand for luxury goods during an economic downturn?

• a) It increases

• b) It decreases

• c) It remains unchanged

• d) It becomes perfectly elastic

When supply and demand are in equilibrium, what happens to prices?

• a) They increase

• b) They decrease

• c) They remain stable

• d) They fluctuate randomly

Which of the following best describes a competitive market?

• a) A market with only one seller

• b) A market with numerous buyers and sellers

• c) A market with barriers to entry

• d) A market with government intervention

What does the demand curve represent in the supply and demand model?

• a) The quantity of a good or service that producers are willing to supply at various prices

• b) The relationship between the price of a good and the quantity demanded by consumers

• c) The relationship between the price of a good and the quantity supplied by producers

• d) The equilibrium point where supply equals demand

When the supply curve shifts to the left, what does it indicate?

• a) Increase in supply

• b) Decrease in supply

• c) Increase in demand

• d) Decrease in demand

In a competitive market described by the supply and demand model, what happens when there is excess demand?

• a) Prices decrease

• b) Prices remain unchanged

• c) Prices increase

• d) Quantity supplied decreases

What does a shift to the right in the supply curve indicate?

• a) Increase in supply

• b) Decrease in supply

• c) Increase in demand

• d) Decrease in demand

In the long run, what happens to supply in response to increased demand?

• a) It remains constant

• b) It decreases

• c) It increases

• d) It becomes perfectly elastic

What happens to the supply of agricultural products during a drought?

• a) It increases

• b) It decreases

• c) It remains unchanged

• d) It becomes perfectly elastic

In the supply and demand model, what does a price ceiling create?

• a) Surplus

• b) Shortage

• c) Equilibrium

• d) Elasticity