Market Equilibrium and Supply-Demand Dynamics Quiz

Test your understanding of microeconomics with this quiz on market equilibrium, supply-demand dynamics, elasticity, and more. Practice now!

Practice Learn Test

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

What is a determinant of supply?

Price of substitutes

Consumer preferences

Technology

Income of buyers

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

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

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

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

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

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

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

#10

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

#11

Which factor does NOT typically cause a shift in the supply curve?

Changes in input prices

Technological advancements

Changes in consumer preferences

Government regulations

#12

What is the income elasticity of demand for normal goods?

Positive

Negative

Zero

Undefined

#13

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

#14

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

#15

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