Principles of Economics - Demand Quiz
Explore demand theory with this quiz! Test your understanding of the law of demand, elasticity, consumer surplus, and more in economics.
#1
What is the law of demand?
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
#2
What is elasticity of demand?
A measure of how responsive quantity demanded is to a change in price
The total quantity demanded in the market
The sensitivity of producers to market trends
The willingness of consumers to buy a good
#3
What is the difference between individual demand and market demand?
Individual demand refers to the overall demand in the market, whereas market demand is specific to an individual consumer.
Individual demand is the demand of a single consumer, while market demand is the sum of individual demands in the market.
Individual demand is a microeconomic concept, and market demand is a macroeconomic concept.
Individual demand and market demand are terms used interchangeably.
#4
What is the concept of 'price elasticity of demand'?
A measure of how responsive quantity demanded is to changes in consumer income.
The sensitivity of producers to changes in market conditions.
A measure of how responsive quantity demanded is to changes in price.
The total quantity demanded in the market.
#5
What is the concept of 'price ceiling' in economics?
The highest price a consumer is willing to pay for a good.
A legal maximum price set by the government to prevent prices from rising above a certain level.
The point where supply and demand intersect in the market.
The lowest price a producer is willing to accept for a good.
#6
What does the demand curve illustrate?
Supply and demand equilibrium
The relationship between price and quantity demanded
Government intervention in the market
Production costs
#7
Which factor does NOT typically influence demand?
Consumer preferences
Income levels
Cost of production
Price of related goods
#8
If the cross-price elasticity of two goods is positive, what does it indicate about the goods?
They are substitutes
They are complements
They are inferior goods
They are normal goods
#9
What is the income elasticity of demand for a normal good?
Positive
Negative
Zero
Undefined
#10
What is the 'law of supply' in economics?
As the price of a good increases, the quantity supplied increases.
As the price of a good decreases, the quantity supplied increases.
The quantity supplied and price are unrelated.
Supply is constant regardless of price changes.
#11
What is an inferior good?
A good for which demand decreases as income increases
A good for which demand increases as income increases
A luxury good
A normal good
#12
According to the law of diminishing marginal utility, what happens as a consumer consumes more of a good?
Total utility increases at a constant rate
Marginal utility increases
Marginal utility decreases
Total utility remains constant
#13
What is the concept of consumer surplus?
The difference between the highest price a consumer is willing to pay and the price they actually pay
The extra satisfaction gained from consuming one more unit of a good
The difference between producer revenue and production costs
The total satisfaction derived from consuming a good
#14
In the context of demand, what is the 'Giffen Paradox'?
A situation where the demand for a good increases as its price rises
A situation where the demand for a good decreases as its price rises
A type of inelastic demand
A situation where the demand for a good is perfectly elastic
#15
What is the concept of 'elasticity of supply'?
A measure of how responsive quantity supplied is to a change in price.
The total quantity supplied in the market.
The sensitivity of consumers to changes in market conditions.
The willingness of producers to sell a good.
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