Microeconomic Analysis of Consumer Behavior and Market Equilibrium Quiz

Test your knowledge with questions on demand, elasticity, consumer surplus, market equilibrium & more!

Practice Learn Test

What does the law of demand state?

As price increases, quantity demanded decreases

As price increases, quantity demanded increases

As price decreases, quantity demanded increases

As price remains constant, quantity demanded varies

What is the concept of market equilibrium?

The point where demand exceeds supply

The point where supply exceeds demand

The point where quantity demanded equals quantity supplied

The point where price exceeds both demand and supply

What is the law of diminishing marginal utility?

As the quantity consumed increases, the total utility also increases

As the quantity consumed increases, the marginal utility decreases

As the quantity consumed decreases, the total utility also decreases

As the quantity consumed decreases, the marginal utility increases

What is the equation 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

What is consumer surplus?

The difference between total revenue and total cost

The difference between the maximum price a consumer is willing to pay and the actual price

The difference between total utility and total expenditure

The difference between total revenue and total expenditure

What does a price ceiling set below the equilibrium price result in?

Shortage

Surplus

Equilibrium

No effect

What is the income elasticity of demand?

The percentage change in quantity demanded divided by the percentage change in income

The percentage change in income divided by the percentage change in quantity demanded

The change in quantity demanded divided by the change in income

The change in income divided by the change in quantity demanded

What is a normal good?

A good for which demand decreases as income decreases

A good for which demand increases as income increases

A good for which demand remains constant as income changes

A good for which demand increases as price decreases

What is a Giffen good?

A good for which demand decreases as income increases

A good for which demand increases as income increases

A good for which demand decreases as price decreases

A good for which demand increases as price decreases

#10

What does a perfectly elastic demand curve look like?

Horizontal line

Vertical line

Downward-sloping line

Upward-sloping line

#11

What is the relationship between price elasticity of demand and total revenue?

They have an inverse relationship

They have a direct relationship

They are not related

The relationship depends on the type of good

#12

What is the slope of the demand curve if demand is perfectly elastic?

Zero

Infinity

Positive

Negative

#13

What is the difference between a movement along the demand curve and a shift of the demand curve?

A movement along the demand curve is caused by changes in price, while a shift of the demand curve is caused by changes in factors other than price

A movement along the demand curve is caused by changes in factors other than price, while a shift of the demand curve is caused by changes in price

Both are caused by changes in price

Both are caused by changes in factors other than price