Quiz on Market Demand and Supply

What is the definition of a market?

• The process of exchanging goods and services between buyers and sellers

• A government regulation on prices

• A place where goods are stored

• A type of financial institution

What does the Law of Demand state?

• Quantity demanded remains constant regardless of price

• As price rises, quantity demanded rises

• As price falls, quantity demanded rises

• Price and quantity demanded are directly related

What does 'Ceteris Paribus' mean?

• All other things remain unchanged

• Market conditions are stable

• All prices are fixed

• Only one variable changes

What effect describes the tendency to substitute a good when its price rises?

• Market Effect

• Income Effect

• Demand Effect

• Substitution Effect

What is the difference between individual demand and market demand?

• There is no difference

• Individual demand is based on supply, market demand is not

• Market demand is always higher than individual demand

• Individual demand is for one person, market demand is for all individuals

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

• Price elasticity

• Price of the good

• Quantity supplied

• Number of buyers

What does the Law of Supply indicate?

• As price rises, quantity supplied falls

• As price falls, quantity supplied rises

• As price rises, quantity supplied rises

• Price and quantity supplied are inversely related

What is the market-clearing price?

• The price at which quantity demanded exceeds quantity supplied

• The average price of goods in the market

• The price at which quantity supplied exceeds quantity demanded

• The price at which quantity demanded equals quantity supplied

What results from a surplus in the market?

• Quantity demanded exceeds quantity supplied

• Equilibrium is achieved

• Quantity supplied exceeds quantity demanded

• Prices decrease

Which of the following is NOT a non-price determinant of supply?

• Number of sellers

• Technology

• Price of related goods

• Consumer preferences