Economic Equilibrium and Market Dynamics Quiz

Test your knowledge on demand, supply, equilibrium, elasticity, and market structures. Understand key economic principles in this quiz.

Practice Learn Test

What is the law of demand?

As price increases, quantity demanded decreases.

As price decreases, quantity demanded decreases.

As price decreases, quantity demanded increases.

As price increases, quantity demanded increases.

What is the law of supply?

As price increases, quantity supplied decreases.

As price decreases, quantity supplied decreases.

As price decreases, quantity supplied increases.

As price increases, quantity supplied increases.

What is the market equilibrium?

When supply is greater than demand.

When demand is greater than supply.

When supply equals demand.

When supply and demand are unrelated.

What is a price ceiling?

A maximum price that can be charged for a good or service.

A minimum price that can be charged for a good or service.

A market condition where supply exceeds demand.

A market condition where demand exceeds supply.

What is a price floor?

A maximum price that can be charged for a good or service.

A minimum price that can be charged for a good or service.

A market condition where supply exceeds demand.

A market condition where demand exceeds supply.

What is the difference between a monopoly and an oligopoly?

A monopoly has one seller, and an oligopoly has a few sellers.

A monopoly has a few sellers, and an oligopoly has one seller.

A monopoly has many sellers, and an oligopoly has one seller.

A monopoly has one seller, and an oligopoly has many sellers.

What is a demand curve?

A graphical representation of the relationship between price and quantity demanded.

A graphical representation of the relationship between price and quantity supplied.

A graphical representation of the relationship between quantity demanded and quantity supplied.

A graphical representation of the relationship between price and demand.

What is a supply curve?

A graphical representation of the relationship between price and quantity demanded.

A graphical representation of the relationship between price and quantity supplied.

A graphical representation of the relationship between quantity demanded and quantity supplied.

A graphical representation of the relationship between price and demand.

What is the substitution effect?

When consumers buy more of a good as its price falls and less as its price rises.

When consumers switch to a substitute good as its price falls and away from it as its price rises.

When consumers buy more of a good as its price rises and less as its price falls.

When consumers switch to a complementary good as its price falls and away from it as its price rises.

#10

What is the point of intersection between the supply and demand curves called?

Market equilibrium.

Price ceiling.

Price floor.

Substitution effect.

#11

What is the difference between a shift and a movement along a demand curve?

A shift is a change in quantity demanded due to a change in price, while a movement along the curve is a change in quantity demanded due to a change in income.

A shift is a change in quantity demanded due to a change in price, while a movement along the curve is a change in price.

A shift is a change in demand due to a change in price, while a movement along the curve is a change in quantity demanded due to a change in income.

A shift is a change in demand due to a change in price, while a movement along the curve is a change in price.

#12

What is the formula for price elasticity of demand?

Percentage change in quantity demanded divided by percentage change in price.

Percentage change in price divided by percentage change in quantity demanded.

Percentage change in quantity supplied divided by percentage change in price.

Percentage change in price divided by percentage change in quantity supplied.

#13

What is the difference between nominal and real interest rates?

Nominal interest rates account for inflation, while real interest rates do not.

Real interest rates account for inflation, while nominal interest rates do not.

Nominal interest rates are adjusted for inflation, while real interest rates are not.

Real interest rates are adjusted for inflation, while nominal interest rates are not.

#14

What is the concept of 'opportunity cost'?

The cost of an alternative that must be forgone in order to pursue a certain action.

The cost of an alternative that must be pursued in order to avoid a certain action.

The cost of an action that must be forgone in order to pursue an alternative.

The cost of an action that must be pursued in order to avoid an alternative.