#1
What does the law of demand state?
As price increases, demand decreases
As price increases, demand increases
As price decreases, demand increases
As price decreases, demand decreases
#2
What is a determinant of supply?
Price of substitutes
Consumer preferences
Technology
Income of buyers
#3
What is the equilibrium price?
The price at which quantity supplied equals quantity demanded
The price at which quantity supplied is greater than quantity demanded
The price at which quantity supplied is less than quantity demanded
The price at which demand equals zero
#4
What is a complementary good?
A good that is always inferior to other goods
A good that is always a luxury item
A good that is used in conjunction with another good
A good that is produced alongside another good
#5
What is a surplus?
When quantity demanded exceeds quantity supplied
When quantity supplied exceeds quantity demanded
When demand and supply are in equilibrium
When price is at its maximum level
#6
What is a price ceiling?
A government-imposed minimum price below which a good or service cannot be sold
A government-imposed maximum price above which a good or service cannot be sold
The price level at which quantity demanded exceeds quantity supplied
The price level at which quantity supplied exceeds quantity demanded
#7
What is the relationship between price and quantity demanded on a demand curve?
Positive
Negative
Zero
Undefined
#8
What is the law of diminishing marginal utility?
As consumption increases, marginal utility increases
As consumption increases, marginal utility decreases
As consumption decreases, marginal utility increases
As consumption decreases, marginal utility decreases
#9
What is the relationship between price and quantity supplied on a supply curve?
Positive
Negative
Zero
Undefined
#10
What is the law of increasing opportunity cost?
As production increases, the opportunity cost decreases
As production increases, the opportunity cost remains constant
As production increases, the opportunity cost increases
As production decreases, the opportunity cost increases
#11
What happens to market equilibrium if there is an increase in both demand and supply?
Equilibrium price increases, quantity is indeterminate
Equilibrium quantity increases, price is indeterminate
Equilibrium price and quantity increase
Equilibrium price and quantity decrease
#12
What is price elasticity of demand?
The responsiveness of quantity demanded to changes in income
The responsiveness of quantity demanded to changes in price
The responsiveness of quantity demanded to changes in the price of related goods
The responsiveness of quantity demanded to changes in tastes and preferences
#13
What is a price floor?
A government-imposed minimum price below which a good or service cannot be sold
A government-imposed maximum price above which a good or service cannot be sold
The price level at which quantity demanded exceeds quantity supplied
The price level at which quantity supplied exceeds quantity demanded
#14
What is the law of supply?
As price increases, supply increases
As price increases, supply decreases
As price decreases, supply increases
As price decreases, supply decreases
#15
Which factor does NOT typically cause a shift in the supply curve?
Changes in input prices
Technological advancements
Changes in consumer preferences
Government regulations
#16
What is the income elasticity of demand for normal goods?
Positive
Negative
Zero
Undefined
#17
What is the price elasticity of demand for a perfectly inelastic good?
Equal to zero
Less than zero
Greater than one
Undefined
#18
What does a shift to the left in the demand curve indicate?
Increase in demand
Decrease in demand
Increase in supply
Decrease in supply
#19
What is the effect of a tax on a good in a market?
Increases demand
Decreases demand
Increases supply
Decreases supply
#20
What is the price elasticity of supply for a perfectly inelastic good?
Equal to zero
Less than zero
Greater than one
Undefined
#21
What does a shift to the right in the supply curve indicate?
Increase in demand
Decrease in demand
Increase in supply
Decrease in supply
#22
What is the effect of a subsidy on a good in a market?
Increases demand
Decreases demand
Increases supply
Decreases supply
#23
What is the difference between a movement along the demand curve and a shift of the demand curve?
A movement occurs due to a change in price, while a shift occurs due to a change in quantity demanded
A movement occurs due to a change in quantity demanded, while a shift occurs due to a change in price
A movement represents a change in quantity demanded at a specific price, while a shift represents a change in quantity demanded at all prices
A movement represents a change in price, while a shift represents a change in income
#24
What is elasticity of supply?
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded to changes in price
The responsiveness of quantity supplied to changes in income
The responsiveness of quantity demanded to changes in income
#25
In the long run, a perfectly competitive market will adjust to changes in demand by:
Adjusting quantity supplied
Adjusting prices
Both adjusting quantity supplied and prices
Neither adjusting quantity supplied nor prices