#1
In economics, what does the term 'market equilibrium' refer to?
A situation where demand exceeds supply
A situation where supply exceeds demand
A situation where quantity demanded equals quantity supplied
A situation where price is fixed by the government
#2
Which of the following is a determinant of demand in economics?
Price of substitutes
Number of firms in the market
Cost of production
Government regulations
#3
What is the law of demand in economics?
As price increases, quantity demanded decreases
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price decreases, quantity demanded increases
#4
Which of the following is NOT a determinant of supply?
Technology
Input prices
Consumer preferences
Number of sellers
#5
What is the definition of 'price elasticity of demand' in economics?
The change in quantity demanded divided by the change in price
The change in price divided by the change in quantity demanded
The percentage change in quantity demanded divided by the percentage change in price
The percentage change in price divided by the percentage change in quantity demanded
#6
Which of the following is NOT a determinant of price elasticity of demand?
Availability of substitutes
Necessity of the good
Time horizon
Income level
#7
What happens to market equilibrium price and quantity if both demand and supply increase?
Price decreases, quantity increases
Price increases, quantity decreases
Price increases, quantity increases
Price decreases, quantity decreases
#8
If the government imposes a price floor above the equilibrium price, what is the likely effect?
Excess demand
Excess supply
No effect on the market
Market equilibrium will shift to a higher price
#9
What happens to market equilibrium price and quantity if demand decreases and supply increases?
Price decreases, quantity increases
Price increases, quantity decreases
Price decreases, quantity decreases
Price increases, quantity increases
#10
If the government imposes a price ceiling below the equilibrium price, what is the likely effect?
Excess demand
Excess supply
No effect on the market
Market equilibrium will shift to a lower price
#11
What is the effect on equilibrium price and quantity if both demand and supply decrease?
Price increases, quantity decreases
Price decreases, quantity decreases
Price decreases, quantity increases
Price increases, quantity increases
#12
If the government imposes an excise tax on a good, how does it affect the market equilibrium?
Increases both equilibrium price and quantity
Decreases both equilibrium price and quantity
Increases equilibrium price, decreases equilibrium quantity
Decreases equilibrium price, increases equilibrium quantity
#13
What does the term 'elasticity' measure in economics?
The slope of the demand curve
The responsiveness of quantity demanded to a change in price
The total revenue in the market
The level of consumer satisfaction
#14
What does the term 'cross-price elasticity of demand' measure?
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 demanded to a change in the price of substitutes only
The responsiveness of quantity demanded to a change in the price of complements only
#15
What is 'consumer surplus' in economics?
The difference between the price consumers are willing to pay and the price they actually pay
The total amount of money consumers spend on goods and services
The difference between the price producers are willing to sell for and the price they actually sell for
The total amount of profit earned by consumers
#16
What is 'producer surplus' in economics?
The difference between the price producers are willing to sell for and the price they actually sell for
The total amount of money producers receive from selling goods and services
The difference between the price consumers are willing to pay and the price they actually pay
The total amount of profit earned by producers
#17
What is the concept of 'deadweight loss' in economics?
Loss of consumer surplus due to overproduction
Loss of producer surplus due to underproduction
Loss of total surplus due to a market inefficiency
Loss of government revenue due to taxation