#1
Which of the following is an example of a market intervention?
Price ceiling
Natural equilibrium
Perfect competition
Monopoly
#2
What is the primary objective of market interventions?
To achieve perfect competition
To stabilize prices
To eliminate demand and supply imbalances
To maximize profits for producers
#3
What is the primary goal of a price floor?
To keep prices below equilibrium
To prevent prices from falling below a certain level
To encourage producers to increase supply
To promote competition among buyers
#4
Which of the following is an example of a government-imposed quota?
Import tariff
Minimum wage
Trade embargo
Production limit
#5
What is the primary goal of a subsidy in a market?
To decrease supply
To increase demand
To decrease consumer surplus
To incentivize producers
#6
What does price elasticity of demand measure?
The responsiveness of quantity demanded to changes in price
The percentage change in price for a one percent change in quantity demanded
The total revenue earned by firms in a market
The slope of the demand curve
#7
Which of the following statements is true regarding elastic demand?
Price changes have no effect on quantity demanded
Price changes have a proportionately smaller effect on quantity demanded
Price changes have a proportionately larger effect on quantity demanded
Price changes cause quantity demanded to remain constant
#8
If the price elasticity of demand for a good is greater than 1, it is considered to be:
Inelastic
Unitary elastic
Elastic
Perfectly elastic
#9
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Change in quantity demanded / Change in price
Change in price / Change in quantity demanded
#10
Which of the following is an example of a price ceiling?
Rent control
Minimum wage
Subsidies for farmers
Trade tariffs
#11
If the cross-price elasticity of demand between two goods is negative, what can be concluded about their relationship?
They are complementary goods
They are substitutes
There is no relationship between the goods
They are unrelated to each other
#12
What is the relationship between the price elasticity of supply and the slope of the supply curve?
They are inversely related
They are directly related
There is no relationship between them
It depends on the type of supply curve
#13
What happens to total revenue if demand is inelastic and the price decreases?
Total revenue increases
Total revenue decreases
Total revenue remains constant
It depends on the magnitude of the price change
#14
Which of the following is NOT a determinant of price elasticity of demand?
Availability of substitutes
Income level of consumers
Time horizon
Consumer preferences
#15
If a good has perfectly inelastic demand, its price elasticity of demand is equal to:
#16
Which of the following describes a situation where the demand for a good is highly price elastic?
The good has few substitutes available
Consumers spend a small portion of their income on the good
The time period under consideration is short
The good is a necessity with no close substitutes
#17
What effect does a tax imposed on producers have on the equilibrium price and quantity in the market?
Price increases, quantity decreases
Price decreases, quantity decreases
Price increases, quantity increases
Price decreases, quantity increases
#18
What happens to consumer surplus if the price of a good decreases?
It increases
It decreases
It remains unchanged
It depends on the income elasticity of demand
#19
What effect does a subsidy on a good have on consumer surplus?
It increases
It decreases
It remains unchanged
It depends on the price elasticity of demand