#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
High barriers to entry
Product differentiation
Control over market price by a single firm
#2
In economics, what does the term 'equilibrium' refer to?
A state where demand exceeds supply
A situation where prices remain constant over time
A condition where quantity supplied equals quantity demanded
A situation where consumer preferences are met
#3
Which of the following is a characteristic of a market in disequilibrium?
Excess demand
Excess supply
Equilibrium price
No trading
#4
What happens to the equilibrium price and quantity when demand increases and supply decreases?
Price increases, quantity increases
Price decreases, quantity decreases
Price increases, quantity decreases
Price decreases, quantity increases
#5
What happens to market equilibrium if both demand and supply increase by the same amount?
Equilibrium price increases, equilibrium quantity decreases
Equilibrium price decreases, equilibrium quantity increases
Equilibrium price and quantity remain unchanged
Equilibrium price and quantity both increase
#6
Which of the following would most likely result in an increase in the equilibrium price and quantity of coffee?
A decrease in the price of tea, a substitute for coffee
A decrease in the cost of producing coffee
An increase in consumer income, leading to higher demand for coffee
An increase in the price of coffee-making machines
#7
In a monopolistic market, what is true about the level of product differentiation?
Products are identical
Products are similar but not identical
Products are highly differentiated
There is no product differentiation
#8
Which of the following scenarios would lead to a decrease in the equilibrium price of laptops?
A decrease in the price of desktop computers, a substitute for laptops
An increase in the cost of producing laptops
A decrease in consumer income, leading to lower demand for laptops
An increase in the number of laptop manufacturers
#9
In a perfectly competitive market, what is true about the long-run equilibrium of firms?
Firms earn economic profit
Firms produce at the minimum of average total cost
Firms operate inefficiently
Firms set prices above marginal cost
#10
What is the primary reason for a decrease in equilibrium quantity in a market?
Decrease in supply and increase in demand
Increase in supply and decrease in demand
Increase in both supply and demand
Decrease in both supply and demand
#11
What is the main factor that determines the elasticity of supply in a market?
The availability of substitutes
The time period under consideration
The size of the market
The level of production costs
#12
What is the effect of a technological advancement that reduces production costs on market equilibrium?
Increase in equilibrium price and decrease in equilibrium quantity
Decrease in equilibrium price and increase in equilibrium quantity
Increase in both equilibrium price and quantity
Decrease in both equilibrium price and quantity
#13
What is the effect of a decrease in the price of a complementary good on the equilibrium price and quantity of a product?
Equilibrium price decreases, equilibrium quantity decreases
Equilibrium price decreases, equilibrium quantity increases
Equilibrium price increases, equilibrium quantity decreases
Equilibrium price increases, equilibrium quantity increases
#14
In a market with elastic demand and inelastic supply, what happens if there is an increase in production costs?
Equilibrium price decreases, equilibrium quantity decreases
Equilibrium price decreases, equilibrium quantity increases
Equilibrium price increases, equilibrium quantity decreases
Equilibrium price increases, equilibrium quantity increases
#15
What is the effect of a decrease in the price of raw materials used in production on market equilibrium?
Equilibrium price decreases, equilibrium quantity decreases
Equilibrium price decreases, equilibrium quantity increases
Equilibrium price increases, equilibrium quantity decreases
Equilibrium price increases, equilibrium quantity increases