#1
What does the law of demand state?
As price increases, quantity demanded increases
As price decreases, quantity demanded increases
As price increases, quantity demanded decreases
As price decreases, quantity demanded decreases
#2
Which of the following is NOT a determinant of demand?
Income
Price of related goods
Technology
Tastes and preferences
#3
Which of the following is a determinant of supply?
Price of substitutes
Income
Consumer preferences
Cost of production
#4
What is the result if there is a surplus in the market?
Excess demand
Excess supply
Market equilibrium
Market shortage
#5
Which of the following is an example of a substitute good?
Peanut butter and jelly
Coffee and tea
Butter and margarine
Apples and oranges
#6
If the price of a complement good increases, what happens to the demand for the other good?
Demand increases
Demand decreases
Demand remains unchanged
Demand becomes elastic
#7
Which of the following statements best describes market equilibrium?
The point where quantity demanded equals quantity supplied
The point where quantity demanded is greater than quantity supplied
The point where quantity demanded is less than quantity supplied
The point where quantity demanded and quantity supplied are unrelated
#8
Which of the following will NOT cause a shift in the demand curve?
Change in consumer income
Change in the price of the good
Change in consumer preferences
Change in the price of substitutes
#9
If there is an increase in supply and a decrease in demand, what happens to the equilibrium quantity?
It increases
It decreases
It remains unchanged
It cannot be determined
#10
What happens to the equilibrium price and quantity if both demand and supply increase?
Price increases, quantity decreases
Price decreases, quantity decreases
Price decreases, quantity increases
Price remains constant, quantity increases
#11
What happens to market equilibrium price and quantity if both demand and supply decrease?
Price increases, quantity decreases
Price decreases, quantity decreases
Price decreases, quantity increases
Price remains constant, quantity decreases
#12
What does a price ceiling set below the equilibrium price cause in the market?
A surplus
A shortage
An excess supply
A decrease in demand
#13
What happens to equilibrium price and quantity if there is a decrease in supply and no change in demand?
Price increases, quantity increases
Price decreases, quantity decreases
Price decreases, quantity increases
Price increases, quantity decreases
#14
If the price elasticity of demand for a good is greater than 1, how is demand classified?
Perfectly inelastic
Inelastic
Unit elastic
Elastic
#15
What is the price elasticity of supply?
The responsiveness of quantity demanded to a change in price
The responsiveness of quantity supplied to a change in price
The proportion of income spent on a good
The percentage change in quantity supplied