Economics Quiz

What does the law of demand state?

• As the price of a good/service rises, demand increases

• As the price of a good/service rises, demand decreases

• As the price of a good/service rises, supply decreases

• As the price of a good/service rises, supply increases

What is the main focus of microeconomics?

• Studying the economy as a whole

• Forecasting economic trends

• Examining individual economic agents

• Analyzing market equilibrium

What are the factors of production according to economics?

• Land, Labor, Capital, Entrepreneurship

• Labor, Capital, Goods, Services

• Water, Air, Fire, Earth

• Money, Technology, Resources, Innovation

What is the law of supply?

• As prices rise, quantity supplied increases

• As prices fall, quantity supplied decreases

• As prices rise, quantity supplied decreases

• As prices fall, quantity supplied increases

What is the income effect in relation to the law of demand?

• Consumers opt for more expensive items

• Consumers substitute cheaper items with expensive ones

• Consumers feel wealthier as prices increase

• Consumers feel less affluent as prices increase

What is the equilibrium price in a market?

• The lowest price in the market

• The price set by the government

• The highest price in the market

• The price where quantity demanded equals quantity supplied

What does the law of supply explain?

• As prices rise, quantity supplied decreases

• As prices fall, quantity supplied decreases

• As prices fall, quantity supplied increases

• As prices rise, quantity supplied increases

What is the concept of diminishing marginal utility?

• Consumers gain more satisfaction with each additional unit consumed

• Consumers gain less satisfaction with each additional unit consumed

• Consumers become more willing to pay for additional units consumed

• Consumers experience constant satisfaction with each additional unit consumed

What is the price elasticity of demand?

• Measures the sensitivity of supply to income changes

• Measures the sensitivity of supply to price changes

• Measures the sensitivity of demand to price changes

• Measures the sensitivity of demand to income changes

What does the income elasticity of demand measure?

• Sensitivity of supply to price changes

• Sensitivity of demand to price changes

• Responsiveness of quantity supplied to changes in income

• Responsiveness of quantity demanded to changes in income