Test your knowledge on demand theory, elasticity, and market participation with 16 insightful questions. Explore key concepts like law of demand, cross-price elasticity, and more.
Which of the following is NOT a determinant of market demand?
Price of the product
Consumer income
Number of sellers in the market
Consumer preferences
#2
What is the law of demand?
As price decreases, quantity demanded increases
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price increases, quantity demanded decreases
#3
Which of the following is an example of a substitute good?
Coffee and tea
Peanut butter and jelly
Cars and gasoline
Hamburgers and French fries
#4
Which of the following is likely to have a more inelastic demand?
Salt
Luxury cars
Smartphones
Movie tickets
#5
What does a downward-sloping demand curve indicate?
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price decreases, quantity demanded increases
As price increases, quantity demanded decreases
#6
What is elasticity of demand?
A measure of the responsiveness of quantity demanded to a change in price
The ratio of quantity demanded to quantity supplied
A measure of the responsiveness of quantity supplied to a change in price
The ratio of price to quantity demanded
#7
What is the difference between individual demand and market demand?
Individual demand refers to the total quantity of a good demanded by all consumers, while market demand refers to the quantity demanded by an individual consumer.
Individual demand refers to the quantity of a good demanded by an individual consumer, while market demand refers to the total quantity demanded by all consumers in the market.
Individual demand refers to the demand for luxury goods, while market demand refers to the demand for essential goods.
There is no difference between individual demand and market demand.
#8
What is the cross-price elasticity of demand for complementary goods?
Positive
Negative
Zero
It depends on the specific goods
#9
What is the income elasticity of demand for a normal good?
Positive
Negative
Zero
It depends on the specific good
#10
What is the relationship between price elasticity of demand and total revenue?
They move in opposite directions
They move in the same direction
There is no relationship between them
It depends on the price level
#11
What happens to the demand curve when there is an increase in consumer income for a normal good?
The demand curve shifts leftward
The demand curve shifts rightward
The demand curve becomes flatter
There is no change to the demand curve
#12
What does a perfectly elastic demand curve look like?
Horizontal line
Vertical line
Positive slope
Negative slope
#13
If the price of a good increases and the demand for its complement decreases, what will happen to the demand for the original good?
Increase
Decrease
No change
It depends on the income level
#14
What happens to the elasticity of demand as you move down a straight-line demand curve?
It remains constant
It increases
It decreases
It fluctuates
#15
What does a vertical demand curve indicate?
Perfectly inelastic demand
Perfectly elastic demand
Unitary elastic demand
No demand
#16
What is the primary determinant of price elasticity of demand?