Principles of Market Behavior Quiz

Test your knowledge with these questions on demand, supply, competition, and more. Explore concepts like elasticity, equilibrium, and market structures.

Practice Learn Test

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.

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

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.

Which of the following is NOT a determinant of supply?

Technology

Cost of production

Price of substitutes

Number of sellers

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

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.

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

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

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