Economics Quiz

What does the law of demand state about the relationship between price and quantity demanded?

• As price increases, quantity demanded increases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded decreases

• Price and quantity demanded are unrelated

What is an example of the law of demand in action?

• A store lowering prices to clear inventory

• Shoppers flocking to a Black Friday sale

• A manufacturer increasing production costs

• A supplier reducing the quality of goods

What does the substitution effect indicate?

• A good will be purchased less if it has a lower price

• A good will be purchased more if it has a higher price

• A good will be purchased more if it satisfies the consumer similarly to a higher-priced product

• A good will be purchased less if it satisfies the consumer similarly to a lower-priced product

What does the law of supply state about the relationship between price and quantity supplied?

• As price increases, quantity supplied decreases

• As price decreases, quantity supplied increases

• As price increases, quantity supplied increases

• Price and quantity supplied are unrelated

What is a non-price determinant of demand?

• The current price of a good

• The cost of production

• Regional preferences of consumers

• The quality of a good

What can affect demand by being purchased in conjunction with another good?

• Substitute goods

• Complementary goods

• Technological advancements

• Resource prices

What is a non-price determinant for supply that can make production more efficient?

• Fads

• Taxes

• Technological advancements

• Scarcity

What can cause fluctuations in demand due to rapid changes in consumer taste?

• Subsidies

• Fads

• Opportunity cost

• Trade-offs

What is the term for a limited amount of supply compared to demand in the marketplace?

• Surplus

• Equilibrium

• Scarcity

• Trade-off

What is a graph used to track the cost of producing one good over another?

• Demand curve

• Supply curve

• Production possibilities curve

• Equilibrium graph