Market Equilibrium and Government Intervention Quiz

What is market equilibrium?

• When prices are fixed by the government

• When demand exceeds supply

• When supply exceeds demand

• When quantity demanded equals quantity supplied

What happens during a surplus?

• Prices decrease

• Supply decreases

• Prices increase

• Demand increases

What occurs during a shortage?

• Prices remain constant

• Prices decrease

• Prices increase

• Supply remains constant

What is the effect of an increase in demand with constant supply?

• Quantity demanded decreases

• Quantity supplied decreases

• Price increases

• Price decreases

What is a ceiling price?

• A price that cannot be changed

• A price determined by market forces

• A maximum price set by the government

• A minimum price set by the government

What is a floor price?

• A maximum price set by the government

• A minimum price set by the government

• A price that fluctuates

• A price that is fixed by suppliers

What does the hadith reported by Anas suggest about price fixing?

• It is acceptable to fix prices

• Prices should be fixed by religious leaders

• Prices should be determined by the market

• The government should control prices

According to Ibn Khaldun, what happens when imported goods are scarce?

• Prices increase

• Prices are fixed

• Prices decrease

• Prices remain stable

What is the effect of a subsidy in an economy?

• It increases supply

• It decreases demand

• It increases prices

• It has no effect

What is the effect of an inelastic demand?

• Quantity demanded changes little with price

• Supply decreases

• Quantity demanded changes significantly with price

• Supply increases