Market Forces and Price Mechanisms Quiz
Test your understanding of microeconomics with questions on market forces, price mechanisms, elasticity, and more.
#1
Which of the following is an example of a market force?
Government regulations
Consumer preferences
Corporate social responsibility
Labor unions
#2
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
Product differentiation
Barriers to entry
Price control by a single firm
#3
What is the effect of an increase in consumer income on the demand for normal goods?
Increase in demand
Decrease in demand
No change in demand
Shift in supply
#4
In a market economy, who determines the allocation of resources?
Government authorities
Individual consumers and producers
International organizations
Central planners
#5
What does the price mechanism refer to in economics?
The process of setting prices by government agencies
The automatic adjustment of prices to equate supply and demand
The fixed pricing system in a monopolistic market
The negotiation process between buyers and sellers
#6
In a free market economy, what typically happens when demand for a product increases?
Price decreases due to excess supply
Price remains constant
Price increases due to scarcity
Price is controlled by the government
#7
In economics, what does the term 'elasticity' refer to?
The responsiveness of quantity demanded to a change in price
The total revenue of a firm
The number of substitutes for a good
The level of consumer satisfaction
#8
Which of the following is an example of a positive externality?
Pollution from a factory
Congestion from traffic
Vaccination programs reducing the spread of disease
Noise pollution from construction work
#9
Which of the following is NOT a determinant of supply?
Technology
Resource prices
Consumer income
Number of suppliers
#10
What is the primary function of a price ceiling?
To set a maximum price below the equilibrium price
To ensure producers earn higher profits
To encourage excessive competition
To reduce government intervention in markets
#11
Which of the following is a characteristic of a monopolistic competition market?
Homogeneous products
A large number of firms
Perfect information
Significant barriers to entry
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