#1
What does the law of demand state?
As price increases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded.
#2
Which of the following is NOT a determinant of demand?
Technology
ExplanationExternal factor affecting demand.
#3
Which of the following is a determinant of supply?
Cost of production
ExplanationDirect factor influencing supply.
#4
What is the result if there is a surplus in the market?
Excess supply
ExplanationMore supply than demand.
#5
Which of the following is an example of a substitute good?
Coffee and tea
ExplanationGoods capable of replacing each other.
#6
If the price of a complement good increases, what happens to the demand for the other good?
Demand decreases
ExplanationNegative relationship between price of complement and demand.
#7
Which of the following statements best describes market equilibrium?
The point where quantity demanded equals quantity supplied
ExplanationBalance between supply and demand.
#8
Which of the following will NOT cause a shift in the demand curve?
Change in the price of the good
ExplanationMovement along the demand curve.
#9
If there is an increase in supply and a decrease in demand, what happens to the equilibrium quantity?
It remains unchanged
ExplanationBalanced changes maintaining quantity.
#10
What happens to the equilibrium price and quantity if both demand and supply increase?
Price remains constant, quantity increases
ExplanationBalanced changes maintaining price.
#11
What happens to market equilibrium price and quantity if both demand and supply decrease?
Price remains constant, quantity decreases
ExplanationPrice stability despite reduced quantity.
#12
What does a price ceiling set below the equilibrium price cause in the market?
A shortage
ExplanationDemand surpassing available supply.
#13
What happens to equilibrium price and quantity if there is a decrease in supply and no change in demand?
Price increases, quantity decreases
ExplanationShift in balance affecting price and quantity.
#14
If the price elasticity of demand for a good is greater than 1, how is demand classified?
Elastic
ExplanationDemand sensitive to price changes.
#15
What is the price elasticity of supply?
The responsiveness of quantity supplied to a change in price
ExplanationSupply sensitivity to price changes.