Economics Quiz

To create demand for a good you must desire to own it and what else?

• Have the ability to pay for it

• Know where to buy it

• Understand its uses

• Have a storage place for it

What does the law of demand state?

• The quantity demanded of a good falls when the price of the good rises

• Consumers will buy more of a good when its price is lower and less when its price is higher

• The quantity demanded of a good is unaffected by the price of the good

• The quantity demanded of a good rises when the price of the good rises

What are the four factors, besides price, that affect demand?

• Change in income, consumer preferences/expectations, change in demographics, and the taste/advertising

• Supply, government policies, production technology, and seller's expectations

• Market trends, advertising, global events, and technological advancements

• Price elasticity, income elasticity, cross-price elasticity, and supply elasticity

What is the elasticity of demand?

• The measure of the way quantity supplied reacts to a change in the price

• The ratio of the percentage change in quantity demanded to the percentage change in income

• The measure of how the quantity supplied of a good changes

• The total amount of goods and services demanded in the economy

Which of the following is an example of an object/goods demand that would be considered inelastic and which is in elastic demand?

• Inelastic: Food & Water Elastic: Luxury cars

• Inelastic: Coffee, Elastic: Tap water

• Inelastic: Smartphones, Elastic: Smartphone cases

• Inelastic: Bread, Elastic: Brand name sneakers

What does the law of supply state?

• As the price increases, the quantity demanded decreases.

• As the price increases, the quantity supplied increases.

• Supply creates its own demand.

• The demand for a commodity is inversely related to its price.

What is an excise tax?

• A tax levied on specific goods, services, and activities

• A tax imposed on income

• A tax levied on property ownership

• A tax imposed only on imported goods

What is a surplus in supply?

• A situation where demand exceeds supply

• A situation where supply exceeds demand

• A state of equilibrium between supply and demand

• A government-imposed restriction on how much of a product can be supplied

Taxes need to be paid to what three types of government?

• Federal, State, and Local

• Federal, International, and State

• Local, International, and State

• Federal, Corporate, and Local

What is a sales tax?

• A tax on income earned from sales.

• A tax paid for the sales of certain goods and services.

• A tax on grocery purchases

• A tax only on imported goods.