Economics Demand and Supply Quiz

What is the law of demand?

• Price and quantity demanded are directly related

• Price and quantity demanded are inversely related

• Demand remains constant regardless of price

• None of the above

Which of the following is a determinant of demand?

• Consumer preferences

• Technology

• Input prices

• Government regulations

If the price of a substitute good increases, what happens to the demand for the related good?

• Increases

• Decreases

• Remains unchanged

• Becomes elastic

What does a rightward shift in the demand curve indicate?

• Increase in supply

• Decrease in supply

• Increase in demand

• Decrease in demand

What is the relationship between price and supply?

• Directly related

• Inversely related

• No relationship

• Depends on the market structure

Which of the following can cause a decrease in supply?

• Improved technology

• Decrease in production costs

• Government taxes

• Increased number of suppliers

What is equilibrium price?

• Price at which demand exceeds supply

• Price at which supply exceeds demand

• Price at which quantity demanded equals quantity supplied

• Price determined by government regulation

What happens when there is a surplus in the market?

• Prices tend to rise

• Prices tend to fall

• Prices remain stable

• Demand increases

Which of the following factors would likely cause the supply curve for a product to shift to the left?

• Increase in technology

• Increase in taxes on production

• Increase in the number of suppliers

• Increase in consumer income

If demand for a good is inelastic, what happens to total revenue if the price increases?

• Increases

• Decreases

• Remains unchanged

• Becomes unpredictable