Principles of Microeconomics - Demand Analysis Quiz

Test your understanding of demand in economics, elasticity, consumer and producer surplus, and more with this comprehensive microeconomics quiz.

Practice Learn Test

Which of the following best defines demand in economics?

The quantity of a good or service that consumers are willing and able to buy at a given price and time period

The quantity of a good or service that producers are willing and able to supply at a given price and time period

The amount of money consumers spend on a particular good or service

The total amount of goods and services available in the market

What does the law of demand state?

As price decreases, quantity demanded increases, holding all other factors constant

As price decreases, quantity demanded decreases, holding all other factors constant

As price increases, quantity demanded increases, holding all other factors constant

As price increases, quantity demanded decreases, holding all other factors constant

What is the formula for calculating price elasticity of demand (PED)?

PED = (Percentage change in quantity demanded) / (Percentage change in price)

PED = (Percentage change in price) / (Percentage change in quantity demanded)

PED = (Change in quantity demanded) / (Change in price)

PED = (Change in price) / (Change in quantity demanded)

Which of the following is NOT a factor influencing the price elasticity of demand?

Availability of substitutes

Proportion of income spent on the good

Time period considered

Price of complementary goods

Which of the following is NOT a determinant of producer supply?

Technology

Price of the product

Number of consumers

Input prices

Which of the following is NOT a determinant of demand?

Price of the good or service

Consumer income

Price of related goods

Cost of production

What is the income effect in the context of demand?

The change in quantity demanded of a good due to a change in the good's own price

The change in quantity demanded of a good due to a change in consumer income

The change in quantity demanded of a good due to a change in the price of a related good

The change in quantity demanded of a good due to changes in consumer preferences

What does the price elasticity of demand measure?

The responsiveness of quantity demanded to a change in price

The change in quantity demanded divided by the change in price

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

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

Which of the following goods is likely to have a more elastic demand?

Insulin (a necessity for diabetic patients)

Diamonds (luxury goods)

Salt (a basic necessity)

Coffee (a common beverage)

#10

When is demand said to be unit elastic?

When the price elasticity of demand is greater than 1

When the price elasticity of demand is equal to 1

When the price elasticity of demand is less than 1

When the price elasticity of demand is negative

#11

What is the difference between a change in quantity demanded and a change in demand?

A change in quantity demanded is a movement along the demand curve, while a change in demand is a shift of the entire curve

A change in quantity demanded is a shift of the entire demand curve, while a change in demand is a movement along the curve

Both refer to movements along the demand curve, but a change in quantity demanded is caused by price changes while a change in demand is caused by non-price factors

Both refer to shifts of the entire demand curve, but a change in quantity demanded is caused by non-price factors while a change in demand is caused by price changes

#12

What does it mean if the cross-price elasticity of demand for two goods is negative?

The two goods are complements

The two goods are substitutes

The two goods are unrelated

The two goods are normal goods

#13

What is the difference between elastic and inelastic demand?

Elastic demand is when quantity demanded changes proportionally more than the change in price, while inelastic demand is when quantity demanded changes proportionally less than the change in price

Elastic demand is when quantity demanded changes proportionally less than the change in price, while inelastic demand is when quantity demanded changes proportionally more than the change in price

Elastic demand is when quantity demanded is perfectly responsive to changes in price, while inelastic demand is when quantity demanded is not responsive to changes in price

Elastic demand is when quantity demanded is not responsive to changes in price, while inelastic demand is when quantity demanded is perfectly responsive to changes in price

#14

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

When demand is elastic, an increase in price leads to a decrease in total revenue

When demand is inelastic, an increase in price leads to a decrease in total revenue

When demand is elastic, an increase in price leads to an increase in total revenue

There is no consistent relationship between price elasticity of demand and total revenue

#15

What does it mean if the price elasticity of demand for a good is -0.5?

Demand is elastic

Demand is inelastic

Demand is unit elastic

Demand is perfectly elastic