Quiz on Supply and Demand

What does the law of demand state?

• As price decreases, quantity demanded remains the same

• As price increases, quantity demanded decreases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded increases

What happens to the demand curve when consumer income increases?

• It remains unchanged

• It becomes vertical

• It shifts right

• It shifts left

Which of the following is a factor that can shift the demand curve?

• Production technology

• Number of producers

• Input prices

• Consumer preferences

What is the equilibrium price?

• The highest price consumers are willing to pay

• The price where quantity supplied equals quantity demanded

• The average price of goods in the market

• The lowest price producers are willing to accept

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

• It remains the same

• It decreases

• It becomes unpredictable

• It increases

What is a consumer surplus?

• The difference between the maximum price a consumer is willing to pay and the actual price paid

• The total quantity of goods sold

• The total amount spent by consumers

• The profit made by sellers

What happens to the supply curve when production costs increase?

• It shifts right

• It becomes horizontal

• It remains unchanged

• It shifts left

Which of the following factors can cause a shift in the supply curve?

• Changes in advertising

• Changes in input prices

• Changes in the number of buyers

• Changes in consumer preferences

What is the result of a surplus in the market?

• Prices will rise

• Quantity supplied will decrease

• Quantity demanded will increase

• Prices will fall

If both demand and supply increase simultaneously, what happens to equilibrium quantity?

• It becomes unpredictable

• It remains the same

• It increases

• It decreases