Economics Quiz

What is the law of demand?

• As price increases, quantity demanded increases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded decreases

• As price decreases, quantity demanded remains the same

What is the law of supply?

• As price increases, quantity supplied decreases

• As price decreases, quantity supplied increases

• As price increases, quantity supplied increases

• As price decreases, quantity supplied remains the same

What happens to the demand curve when there is an increase in consumer income?

• It shifts to the left

• It shifts to the right

• It remains unchanged

• It becomes vertical

Which of the following factors does NOT shift the supply curve?

• Technology

• Number of sellers

• Consumer preferences

• Production costs

What is equilibrium price?

• The price at which quantity demanded equals quantity supplied

• The highest price a consumer is willing to pay

• The lowest price a producer is willing to accept

• The price at which demand exceeds supply

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

• It decreases

• It increases

What is a surplus in the market?

• When quantity demanded exceeds quantity supplied

• When quantity supplied exceeds quantity demanded

• When demand and supply are equal

• When prices are too low

What is a shortage in the market?

• When quantity demanded exceeds quantity supplied

• When quantity supplied exceeds quantity demanded

• When demand and supply are equal

• When prices are too high

Which of the following is an example of a non-price determinant of demand?

• Price of the good

• Consumer income

• Production technology

• Number of sellers

What effect does a technological advancement in production have on the supply curve?

• Shifts it to the left

• Shifts it to the right

• No effect

• Makes it vertical