Economic Principles of Demand and Supply Quiz

Test your knowledge on laws, equilibrium, elasticity, surplus, and more in microeconomics. Take this quiz now!

Practice Learn Test

Which of the following best describes the law of demand?

As the price of a good increases, the quantity demanded decreases

As the price of a good increases, the quantity demanded increases

As the price of a good decreases, the quantity demanded decreases

As the price of a good decreases, the quantity demanded increases

What does the law of supply state?

As the price of a good increases, the quantity supplied decreases

As the price of a good increases, the quantity supplied increases

As the price of a good decreases, the quantity supplied decreases

As the price of a good decreases, the quantity supplied increases

What is the equilibrium price?

The price at which quantity demanded equals quantity supplied

The price at which quantity demanded is greater than quantity supplied

The price at which quantity demanded is less than quantity supplied

The price at which quantity supplied is greater than quantity demanded

What is elasticity of demand?

A measure of how much the quantity demanded of a good responds to a change in price

A measure of how much the quantity supplied of a good responds to a change in price

A measure of how much the demand for a good changes with income

A measure of how much the demand for a good changes with the price of another good

What is a determinant of demand?

The price of the good itself

The prices of related goods

Income of the consumer

All of the above

What is a determinant of supply?

The price of the good itself

The prices of inputs

Technology

All of the above

What is the price elasticity of supply?

A measure of how much the quantity demanded of a good responds to a change in price

A measure of how much the quantity supplied of a good responds to a change in price

A measure of how much the supply of a good changes with income

A measure of how much the supply of a good changes with the price of another good

What is the concept of 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 market price

The difference between the total revenue and the total cost of production

The difference between the price a producer receives and the minimum price they are willing to accept

What is the concept of producer 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 market price

The difference between the total revenue and the total cost of production

The difference between the price a producer receives and the minimum price they are willing to accept

#10

What is a price ceiling?

A legal maximum price that can be charged for a good

A legal minimum price that must be paid for a good

A price set by the government that all sellers must adhere to

A price set by the market based on supply and demand

#11

What is a price floor?

A legal maximum price that can be charged for a good

A legal minimum price that must be paid for a good

A price set by the government that all sellers must adhere to

A price set by the market based on supply and demand

#12

What is the difference between a change in quantity demanded and a change in demand?

A change in quantity demanded is a movement along the demand curve, while a change in demand is a shift of the entire curve

A change in quantity demanded is a shift of the demand curve, while a change in demand is a movement along the curve

A change in quantity demanded is caused by a change in price, while a change in demand is caused by a non-price factor

There is no difference, they both refer to the same concept

#13

What is the income elasticity of demand for a normal good?

Greater than zero

Less than zero

Equal to zero

Cannot be determined

#14

What is the cross-price elasticity of demand for substitute goods?

Greater than zero

Less than zero

Equal to zero

Cannot be determined

#15

What is the difference between a change in quantity supplied and a change in supply?

A change in quantity supplied is a movement along the supply curve, while a change in supply is a shift of the entire curve

A change in quantity supplied is a shift of the supply curve, while a change in supply is a movement along the curve

A change in quantity supplied is caused by a change in price, while a change in supply is caused by a non-price factor

There is no difference, they both refer to the same concept

#16

What is the concept of deadweight loss?

The loss in total surplus that occurs when the quantity of a good traded is below the efficient level

The loss in total surplus that occurs when the quantity of a good traded is above the efficient level

The loss in consumer surplus that occurs when the price of a good increases

The loss in producer surplus that occurs when the price of a good decreases