#1
Which of the following describes economic equilibrium?
A state where supply exceeds demand
A state where demand exceeds supply
A state of balance where supply equals demand
A state where there is no supply or demand
#2
What happens to price and quantity when there is excess demand in a market?
Price decreases, quantity increases
Price increases, quantity decreases
Price increases, quantity increases
Price decreases, quantity decreases
#3
What does the law of demand state?
As price increases, quantity demanded decreases
As price decreases, quantity demanded decreases
As price increases, quantity demanded increases
As price decreases, quantity demanded increases
#4
Which of the following is NOT a determinant of supply?
Technological advancements
Resource prices
Income of consumers
Taxes and subsidies
#5
What is the role of price in a market economy?
To determine the quantity supplied
To allocate resources efficiently
To regulate demand
To control competition
#6
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and few sellers
Few buyers and many sellers
Homogeneous products
Barriers to entry
#7
What is the substitution effect?
A change in the price of one good affects the demand for another
A change in income affects the quantity demanded of a good
A change in the price of a good affects the real purchasing power of income
A change in the price of a good affects the quantity supplied
#8
Which of the following is NOT a factor that can shift the demand curve?
Changes in consumer tastes
Changes in the prices of related goods
Changes in technology
Changes in the prices of inputs
#9
What is a price ceiling?
A legal maximum price for a good or service
A legal minimum price for a good or service
A government subsidy for a good or service
A tax imposed on a good or service
#10
What is a price floor?
A legal maximum price for a good or service
A legal minimum price for a good or service
A government subsidy for a good or service
A tax imposed on a good or service
#11
What is elasticity of demand?
The responsiveness of quantity demanded to a change in price
The responsiveness of quantity supplied to a change in price
The responsiveness of demand to changes in income
The responsiveness of demand to changes in the prices of related goods
#12
What is the income effect?
A change in the price of one good affects the demand for another
A change in income affects the quantity demanded of a good
A change in the price of a good affects the real purchasing power of income
A change in the price of a good affects the quantity supplied
#13
What is the cross-price elasticity of demand?
The responsiveness of quantity demanded to a change in price
The responsiveness of quantity demanded to a change in income
The responsiveness of quantity demanded of one good to a change in the price of another good
The responsiveness of quantity supplied to a change in price
#14
What is the law of supply?
As price increases, quantity supplied decreases
As price decreases, quantity supplied decreases
As price increases, quantity supplied increases
As price decreases, quantity supplied increases
#15
In economics, what is the term for the situation when quantity supplied exceeds quantity demanded at a given price?
Surplus
Shortage
Equilibrium
Elasticity
#16
What is a market equilibrium?
A point where demand is greater than supply
A point where supply is greater than demand
A point where supply equals demand
A point where there is no supply or demand
#17
What is a market disequilibrium?
A situation where supply equals demand
A situation where there is excess supply
A situation where there is excess demand
A situation where there is no market
#18
What is a market surplus?
A situation where supply equals demand
A situation where there is excess supply
A situation where there is excess demand
A situation where there is no market
#19
What is consumer surplus?
The difference between the highest price a consumer is willing to pay and the price they actually pay
The difference between the quantity demanded and the quantity supplied at the equilibrium price
The additional satisfaction gained from consuming one more unit of a good
The amount of revenue generated by selling a good at a given price