Supply and Demand Factors Quiz

What does the law of demand state about the relationship between price and quantity demanded?

• As price increases, quantity demanded increases

• As price decreases, quantity demanded remains unchanged

• As price increases, quantity demanded decreases

• As price decreases, quantity demanded decreases

Which of the following would be considered a factor affecting supply?

• Consumer preferences

• Production technology

• Price of the product

• Consumer income

If the price of a complement good increases, what happens to the demand for the original good?

• Demand increases

• Demand decreases

• Demand remains unchanged

• Demand first increases, then decreases

What happens to the supply of a product when there is an improvement in production technology?

• Supply decreases

• Supply remains unchanged

• Supply increases

• Supply first decreases, then increases

How does an increase in the price of raw materials affect the supply of a product?

• Supply increases

• Supply decreases

• Supply remains unchanged

• Supply first increases, then decreases

What effect does an increase in consumer income have on the demand for an inferior good?

• Demand increases

• Demand decreases

• Demand remains unchanged

• Demand first increases, then decreases

Which of the following is a factor that affects demand?

• Number of suppliers

• Consumer preferences

• Cost of production

• Government subsidies for production

What happens to the demand for a good when the price of a substitute good decreases?

• Demand for the original good increases

• Demand for the original good decreases

• Demand for the original good remains unchanged

• Demand for the original good first decreases, then increases