#1
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
#2
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
#3
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
#4
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
#5
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
#6
What is a determinant of supply?
The price of the good itself
The prices of inputs
Technology
All of the above
#7
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
#8
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
#9
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 the concept of total surplus in economics?
The sum of consumer surplus and producer surplus
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, plus the difference between the highest price a consumer is willing to pay and the price they actually pay
#11
What is a subsidy?
A tax imposed on the production or sale of a good
A payment made by the government to producers or consumers of a good
A legal maximum price that can be charged for a good
A legal minimum price that must be paid for a good
#12
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
#13
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
#14
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
#15
What is the income elasticity of demand for a normal good?
Greater than zero
Less than zero
Equal to zero
Cannot be determined
#16
What is the cross-price elasticity of demand for substitute goods?
Greater than zero
Less than zero
Equal to zero
Cannot be determined
#17
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
#18
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
#19
What is the concept of elasticity of labor supply?
A measure of how much the quantity demanded of labor responds to a change in wages
A measure of how much the quantity supplied of labor responds to a change in wages
A measure of how much the demand for labor changes with income
A measure of how much the demand for labor changes with the price of another good
#20
What is the concept of elasticity of capital supply?
A measure of how much the quantity demanded of capital responds to a change in interest rates
A measure of how much the quantity supplied of capital responds to a change in interest rates
A measure of how much the demand for capital changes with income
A measure of how much the demand for capital changes with the price of another good
#21
What is the concept of elasticity of taxation?
A measure of how much tax revenue changes with a change in tax rates
A measure of how much tax revenue changes with a change in income
A measure of how much tax revenue changes with a change in the price of a taxed good
A measure of how much tax revenue changes with a change in the quantity of a taxed good
#22
What is the concept of price elasticity of demand for a luxury good?
Greater than zero
Less than zero
Equal to zero
Cannot be determined
#23
What is the concept of price elasticity of demand for a necessity?
Greater than zero
Less than zero
Equal to zero
Cannot be determined
#24
What is the concept of price elasticity of demand for an inferior good?
Greater than zero
Less than zero
Equal to zero
Cannot be determined
#25
What is the concept of price elasticity of supply for a perfectly inelastic supply?
Greater than zero
Less than zero
Equal to zero
Infinite