#1
Which of the following best describes market equilibrium?
A situation where supply exceeds demand
A situation where demand exceeds supply
A situation where supply equals demand
A situation where neither supply nor demand exists
#2
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
One seller and many buyers
Few sellers and many buyers
Many sellers and one buyer
#3
Which of the following is an example of a public good?
A toll road
Private healthcare
National defense
A luxury yacht
#4
What is the law of demand?
As price increases, quantity demanded decreases
As price decreases, quantity demanded decreases
As price increases, quantity demanded increases
As price decreases, quantity demanded increases
#5
What is the effect of an increase in consumer income on the market equilibrium for normal goods?
Shifts the demand curve to the left
Shifts the demand curve to the right
Shifts the supply curve to the left
Shifts the supply curve to the right
#6
In a competitive market, what happens if the price is above the equilibrium price?
There is a surplus of goods
There is a shortage of goods
Market equilibrium is maintained
Consumers buy fewer goods
#7
Which of the following is a determinant of supply?
Consumer preferences
Technology
Income
Number of buyers
#8
Which of the following scenarios would cause a rightward shift of the demand curve?
An increase in the price of complementary goods
A decrease in consumer income for normal goods
A decrease in the price of substitute goods
An increase in consumer preferences for the good
#9
What happens to the equilibrium price and quantity if both supply and demand increase?
Equilibrium price increases, equilibrium quantity decreases
Equilibrium price decreases, equilibrium quantity increases
Equilibrium price and quantity both increase
Equilibrium price and quantity both decrease
#10
What is the relationship between price elasticity of demand and total revenue?
As price elasticity of demand increases, total revenue decreases
As price elasticity of demand increases, total revenue increases
As price elasticity of demand decreases, total revenue decreases
There is no relationship between price elasticity of demand and total revenue
#11
What is the primary function of a price ceiling?
To keep prices from falling below a certain level
To keep prices from rising above a certain level
To encourage producers to increase production
To encourage consumers to buy more goods
#12
In economics, what is elasticity of demand?
The percentage change in quantity demanded for a percentage change in price
The absolute change in quantity demanded for a unit change in price
The percentage change in price for a percentage change in quantity demanded
The absolute change in price for a unit change in quantity demanded
#13
What is the primary determinant of the price elasticity of demand?
The availability of substitutes
The proportion of income spent on the good
The necessity of the good
The time period under consideration
#14
In the long run, what is the effect of an increase in demand for a product in a perfectly competitive market?
Increase in both price and quantity supplied
Decrease in price and increase in quantity supplied
Increase in price and decrease in quantity supplied
Decrease in both price and quantity supplied
#15
What is the main difference between a change in quantity demanded and a change in demand?
A change in quantity demanded is caused by a shift in the demand curve
A change in demand is caused by a movement along the demand curve
A change in quantity demanded is caused by factors other than price
A change in demand is caused by a change in price
#16
In a monopolistic market structure, what is true about barriers to entry?
There are no barriers to entry
Barriers to entry are high
Barriers to entry are low
Barriers to entry depend on government regulations