Introduction to Economics: Supply and Demand Quiz

What does the Law of Supply and Demand state?

• The price of a good rises as the demand decreases.

• The price of a good falls as the supply increases.

• The price of a good balances at the point where the quantity demanded equals the quantity supplied.

• The supply of a good will decrease as its demand decreases.

What is market equilibrium?

• When the demand for a product exceeds its supply.

• When the supply of a product exceeds its demand.

• When the quantity of a product demanded equals the quantity supplied.

• When the price of a product is artificially set by the government.

Which of the following is NOT a factor affecting supply?

• Technology advancements.

• Consumer preferences.

• Cost of production.

• Number of suppliers.

Which of the following is a factor affecting demand?

• Production technology.

• Income of consumers.

• Cost of raw materials.

• Number of suppliers.

What is scarcity?

• When there is enough of a resource to meet demand.

• When there is a surplus of a product in the market.

• When there is not enough of a resource to satisfy all wants and needs.

• When the government controls the distribution of a resource.

How does an increase in consumer income affect the demand curve for a normal good?

• It shifts to the left.

• It shifts to the right.

• It remains unchanged.

• It becomes more elastic.

What happens to the supply curve when there is an improvement in production technology?

• It shifts to the left.

• It shifts to the right.

• It remains unchanged.

• It becomes more inelastic.

What effect does an increase in the price of a substitute good have on the demand for a product?

• Increases the demand for the product.

• Decreases the demand for the product.

• Has no effect on the demand for the product.

• Decreases the supply of the product.

What is the result of a government setting a price below the market equilibrium?

• A surplus of the product.

• A shortage of the product.

• No change in the market.

• An increase in the quality of the product.

Which of the following would cause a leftward shift in the supply curve of wheat?

• A decrease in the price of wheat.

• An increase in the price of fertilizers.

• A technological advancement in wheat harvesting.

• A decrease in the number of wheat farmers.