#1
Which of the following best describes 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 type of relationship does the price elasticity of supply measure?
Direct relationship between price and quantity supplied.
Inverse relationship between price and quantity supplied.
No relationship between price and quantity supplied.
It depends on the elasticity coefficient.
#3
What is the law of supply?
As price increases, quantity supplied decreases.
As price decreases, quantity supplied increases.
As price increases, quantity supplied increases.
As price decreases, quantity supplied decreases.
#4
What is the concept of price elasticity of demand?
It measures the responsiveness of quantity supplied to a change in price.
It measures the responsiveness of quantity demanded to a change in price.
It measures the responsiveness of quantity demanded to a change in income.
It measures the responsiveness of quantity supplied to a change in income.
#5
What is the law of diminishing marginal utility?
As the quantity of a good consumed increases, the total utility derived from it decreases.
As the quantity of a good consumed increases, the total utility derived from it increases.
As the quantity of a good consumed decreases, the total utility derived from it decreases.
As the quantity of a good consumed decreases, the total utility derived from it increases.
#6
What happens to equilibrium price and quantity when there is an increase in demand?
Equilibrium price increases; equilibrium quantity increases.
Equilibrium price decreases; equilibrium quantity decreases.
Equilibrium price increases; equilibrium quantity decreases.
Equilibrium price decreases; equilibrium quantity increases.
#7
Which factor would cause a rightward shift of the supply curve?
An increase in the price of a substitute good.
A decrease in the cost of production.
A decrease in the number of sellers in the market.
A decrease in consumer income.
#8
What is the relationship between price elasticity of demand and total revenue?
They move in the same direction.
They move in opposite directions.
There is no relationship between them.
It depends on the demand curve.
#9
What happens to equilibrium price and quantity when there is a decrease in supply?
Equilibrium price increases; equilibrium quantity decreases.
Equilibrium price decreases; equilibrium quantity decreases.
Equilibrium price decreases; equilibrium quantity increases.
Equilibrium price increases; equilibrium quantity increases.
#10
What effect would a decrease in the price of a complement have on equilibrium price and quantity?
Equilibrium price increases; equilibrium quantity increases.
Equilibrium price decreases; equilibrium quantity decreases.
Equilibrium price increases; equilibrium quantity decreases.
Equilibrium price decreases; equilibrium quantity increases.
#11
What is the difference between a movement along the demand curve and a shift of the demand curve?
A movement along the demand curve represents a change in quantity demanded, while a shift of the demand curve represents a change in demand.
A movement along the demand curve represents a change in demand, while a shift of the demand curve represents a change in quantity demanded.
They both represent the same thing.
A movement along the demand curve represents a change in supply, while a shift of the demand curve represents a change in demand.
#12
What does a price ceiling set below the equilibrium price lead to?
Surplus
Shortage
Equilibrium
Minimum wage
#13
What does the income elasticity of demand measure?
The responsiveness of quantity demanded to a change in consumer income.
The responsiveness of quantity supplied to a change in consumer income.
The percentage change in quantity demanded for a one percent change in price.
The percentage change in quantity supplied for a one percent change in price.
#14
In the market for a normal good, what happens to equilibrium price and quantity when income increases?
Equilibrium price and quantity increase.
Equilibrium price increases, quantity decreases.
Equilibrium price decreases, quantity increases.
Equilibrium price decreases, quantity decreases.
#15
What does the cross-price elasticity of demand measure?
The responsiveness of quantity demanded to a change in consumer income.
The responsiveness of quantity demanded to a change in the price of a related good.
The percentage change in quantity demanded for a one percent change in price.
The percentage change in quantity supplied for a one percent change in price.
#16
What is the difference between a normal good and an inferior good?
Normal goods have negative income elasticity of demand, while inferior goods have positive income elasticity of demand.
Normal goods have positive income elasticity of demand, while inferior goods have negative income elasticity of demand.
Normal goods have positive cross-price elasticity of demand, while inferior goods have negative cross-price elasticity of demand.
Normal goods have negative cross-price elasticity of demand, while inferior goods have positive cross-price elasticity of demand.
#17
What does the concept of consumer surplus represent?
The difference between the maximum price a consumer is willing to pay for a good and the price they actually pay.
The difference between the quantity demanded and the quantity supplied at the equilibrium price.
The difference between the total revenue and the total cost of production.
The difference between the minimum price a producer is willing to accept for a good and the price they actually receive.