Supply and Demand Quiz

What does the demand curve show?

• The relationship between supply and demand

• The inverse relationship between price and quantity demanded

• The direct relationship between price and quantity demanded

• The relationship between income and demand

What is the substitution effect?

• When the price of a good decreases, people buy other products instead

• When the price of a good decreases, people buy less of it

• When the price of a good increases, people buy other products instead

• When the price of a good increases, people buy more of it

What is the income effect?

• When the price of a good increases, people buy more of it

• When the price of a good increases, people buy less because they have less purchasing power

• When the price of a good decreases, people buy less because they have more purchasing power

• When the price of a good decreases, people buy less of it

What is the law of diminishing marginal utility?

• As you consume less of a good, you get more satisfaction from it

• As you consume less of a good, you get less satisfaction from it

• As you consume more of a good, you get more satisfaction from it

• As you consume more of a good, you get less satisfaction from it

Which of the following is NOT a shifter of demand?

• Income

• Taste and preferences

• Number of consumers

• Price of the good itself

What happens to the demand for ice cream on a hot day?

• It shifts to the right

• It shifts to the left

• It remains unchanged

• It moves along the demand curve

What is a normal good?

• A good for which demand remains unchanged as income changes

• A good for which demand increases as income increases

• A good for which demand increases as income decreases

• A good for which demand decreases as income increases

What is an inferior good?

• A good for which demand increases as income decreases

• A good for which demand decreases as income decreases

• A good for which demand increases as income increases

• A good for which demand remains unchanged as income changes

What does the supply curve show?

• The relationship between income and supply

• The relationship between supply and demand

• The direct relationship between price and quantity supplied

• The inverse relationship between price and quantity supplied

Which of the following is NOT a shifter of supply?

• Price of resources

• Price of the good itself

• Technology

• Number of sellers