#1
What is equilibrium in economics?
A state where demand equals supply
A state where demand exceeds supply
A state where supply exceeds demand
A state where demand and supply are unrelated
#2
What happens to prices in a market when demand exceeds supply?
Prices rise
Prices fall
Prices remain constant
Prices become unpredictable
#3
What is the law of demand?
As the price of a good increases, the quantity demanded increases
As the price of a good increases, the quantity demanded decreases
As the price of a good decreases, the quantity demanded increases
As the price of a good decreases, the quantity demanded remains constant
#4
What is a substitute in economics?
A good that is consumed together with another good
A good that is used in the production of another good
A good that can be used in place of another good
A good that has no relation to other goods
#5
What is the law of supply?
As the price of a good increases, the quantity supplied increases
As the price of a good increases, the quantity supplied decreases
As the price of a good decreases, the quantity supplied increases
As the price of a good decreases, the quantity supplied remains constant
#6
What is a surplus in economics?
A situation where quantity demanded exceeds quantity supplied
A situation where quantity supplied exceeds quantity demanded
A situation where price equals marginal cost
A situation where price equals average total cost
#7
In a competitive market, what happens if there is a surplus of a good?
Producers increase prices to decrease surplus
Producers decrease prices to increase demand
Producers maintain prices to clear surplus
Producers exit the market
#8
What is the price mechanism?
The mechanism by which prices are determined in a market
A government-controlled mechanism to set prices
A mechanism to control supply and demand
A mechanism to regulate inflation
#9
What is the 'invisible hand' concept in economics?
The idea that government intervention is necessary for market equilibrium
The idea that market forces guide resources to their most efficient uses
The concept of demand and supply
The role of central planning in allocating resources
#10
What is the effect of an increase in consumer income on demand for normal goods?
Increase in demand
Decrease in demand
No change in demand
Change in supply
#11
What is the formula for price elasticity of demand?
Percentage change in quantity demanded divided by percentage change in price
Percentage change in price divided by percentage change in quantity demanded
Change in quantity demanded divided by change in price
Change in price divided by change in quantity demanded
#12
What is a complement in economics?
A good that is consumed together with another good
A good that is used in the production of another good
A good that can be used in place of another good
A good that has no relation to other goods
#13
What is a price ceiling?
A maximum price set by the government
A minimum price set by the government
A price set by the market equilibrium
A price determined by demand alone
#14
What is a price floor?
A minimum price set by the government
A maximum price set by the government
A price set by the market equilibrium
A price determined by supply alone
#15
What is the role of elasticity in market equilibrium?
It measures the responsiveness of quantity demanded to price changes
It measures the total quantity demanded in the market
It determines the equilibrium price directly
It regulates the supply side of the market
#16
What does the price elasticity of supply measure?
The responsiveness of quantity supplied to price changes
The total quantity supplied in the market
The equilibrium price
The change in demand due to a change in price
#17
What is the equilibrium quantity?
The quantity demanded at equilibrium
The quantity supplied at equilibrium
The quantity demanded equals the quantity supplied
The quantity demanded exceeds the quantity supplied
#18
What is the market equilibrium price?
The price set by the government
The highest price in the market
The price where quantity demanded equals quantity supplied
The lowest price in the market