Test your knowledge with these questions on demand, supply, competition, and more. Explore concepts like elasticity, equilibrium, and market structures.
Which of the following best describes the law of demand?
As the price of a good increases, the quantity demanded decreases.
As the price of a good decreases, the quantity demanded increases.
As the price of a good increases, the quantity demanded increases.
There is no relationship between price and quantity demanded.
#2
What does the term 'equilibrium price' refer to?
The price at which demand exceeds supply
The price at which supply exceeds demand
The price at which quantity demanded equals quantity supplied
The price at which both demand and supply are zero
#3
What is 'utility' in economics?
The total satisfaction derived from consuming a good or service.
The total revenue generated from selling a good or service.
The total cost incurred in producing a good or service.
The total profit earned from buying and selling goods or services.
#4
Which of the following is NOT a determinant of supply?
Technology
Cost of production
Price of substitutes
Number of sellers
#5
What is 'opportunity cost'?
The total cost of production
The highest-valued alternative that must be sacrificed to engage in an activity
The cost of goods and services purchased in the market
The cost of labor and capital
#6
What is the law of supply?
As the price of a good increases, the quantity supplied decreases.
As the price of a good decreases, the quantity supplied increases.
As the price of a good increases, the quantity supplied increases.
There is no relationship between price and quantity supplied.
#7
In economics, what is 'elasticity of demand'?
The responsiveness of quantity demanded to a change in price
The responsiveness of quantity supplied to a change in price
The percentage change in price relative to the percentage change in quantity demanded
The percentage change in quantity demanded relative to the percentage change in price
#8
What is a 'market failure'?
When the government intervenes in the market to correct imbalances
When the market does not allocate resources efficiently
When demand and supply are in equilibrium
When there is perfect competition in the market
#9
What is the law of diminishing marginal utility?
As a consumer consumes more units of a good, the total utility increases at a decreasing rate.
As a consumer consumes more units of a good, the total utility increases at an increasing rate.
As a consumer consumes more units of a good, the total utility decreases at a decreasing rate.
As a consumer consumes more units of a good, the total utility decreases at an increasing rate.
#10
What is the difference between 'perfect competition' and 'monopolistic competition'?
Perfect competition has many buyers and sellers, while monopolistic competition has only one buyer and seller.
Perfect competition has identical products, while monopolistic competition has differentiated products.
Perfect competition has barriers to entry, while monopolistic competition does not.
Perfect competition results in economic profit, while monopolistic competition results in losses.
#11
What is a 'price ceiling'?
A legal maximum price for a good or service
A legal minimum price for a good or service
The equilibrium price in a market
A price set by the government to eliminate excess supply
#12
What is the difference between 'demand' and 'quantity demanded'?
Demand refers to the desire for a good or service, while quantity demanded refers to the amount of that good or service that consumers are willing and able to purchase at a given price.
Demand refers to the amount of a good or service that consumers are willing and able to purchase at a given price, while quantity demanded refers to the desire for that good or service.
Demand refers to the relationship between price and quantity demanded, while quantity demanded refers to the total demand in the market.
There is no difference between 'demand' and 'quantity demanded'.
#13
What concept describes a situation where a good or service is non-rivalrous and non-excludable?
Public good
Private good
Club good
Common resource
#14
Which market structure is characterized by a single seller with significant control over price?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
#15
What is 'producer surplus'?
The difference between the lowest price a producer is willing to accept and the price they actually receive
The difference between the highest price a consumer is willing to pay and the price they actually pay
The difference between the quantity supplied and the quantity demanded at the equilibrium price
The difference between the total revenue received by producers and the total cost of production
#16
What is 'monopsony'?
A market structure with many buyers and sellers
A market structure with a single seller
A market structure with many buyers but only one seller
A market structure with many sellers but only one buyer
#17
What does the term 'consumer surplus' represent?
The difference between the lowest price a consumer is willing to pay and the price they actually pay
The difference between the total revenue received by consumers and the total cost of production
The difference between the highest price a consumer is willing to pay and the price they actually pay
The difference between the quantity demanded and the quantity supplied at the equilibrium price