Principles of Microeconomics: Supply, Demand, and Price Quiz

Test your knowledge on principles of microeconomics with questions on demand, supply, equilibrium, market structures, and more!

Practice Learn Test

Which of the following best defines the law of demand?

As price decreases, quantity demanded increases, ceteris paribus.

As price increases, quantity demanded decreases, ceteris paribus.

As quantity demanded increases, price increases, ceteris paribus.

As quantity demanded decreases, price decreases, ceteris paribus.

What is the equilibrium price in a market?

The price at which quantity supplied equals quantity demanded.

The highest price consumers are willing to pay.

The lowest price producers are willing to accept.

The price set by the government.

What is the income effect in economics?

The change in quantity demanded due to a change in income.

The change in quantity demanded due to a change in price.

The change in income due to a change in quantity demanded.

The change in price due to a change in income.

What does the price elasticity of demand measure?

The change in quantity demanded in response to a change in price.

The change in price in response to a change in quantity demanded.

The percentage change in quantity demanded in response to a one percent change in price.

The percentage change in price in response to a one percent change in quantity demanded.

In economics, what is the law of supply?

As the price of a good or service increases, the quantity demanded increases.

As the price of a good or service decreases, the quantity supplied increases.

As the price of a good or service increases, the quantity supplied decreases.

As the price of a good or service decreases, the quantity demanded decreases.

If there is an increase in the price of a substitute good, what will likely happen in the market?

Demand for the original good will increase.

Demand for the original good will decrease.

Supply of the original good will increase.

Supply of the original good will decrease.

Which of the following is a determinant of supply?

Price of related goods

Income of consumers

Price expectations

Technology used in production

What does elasticity of demand measure?

The responsiveness of quantity demanded to a change in price.

The responsiveness of price to a change in quantity demanded.

The total quantity demanded at any given price.

The slope of the demand curve.

Which of the following is an example of a price floor?

Minimum wage

Maximum rent

Tax on cigarettes

Subsidy for farmers

#10

What happens to the equilibrium price and quantity when both demand and supply increase?

Equilibrium price increases, equilibrium quantity decreases.

Equilibrium price decreases, equilibrium quantity increases.

Equilibrium price and quantity both increase.

Equilibrium price and quantity both decrease.

#11

Which of the following scenarios is likely to lead to a perfectly elastic demand?

Gasoline in the short run

Antique paintings

Electricity in the long run

Insulin for diabetic patients

#12

Which of the following is a characteristic of a monopolistic competition market structure?

Many firms selling identical products.

A single firm with significant market power.

A small number of firms with interdependent decision-making.

Product differentiation among firms.

#13

What is a perfectly inelastic demand curve?

A curve that is horizontal.

A curve that is vertical.

A curve that is negatively sloped.

A curve that is positively sloped.

#14

Which of the following is a characteristic of a perfectly competitive market?

Product differentiation

A large number of buyers and sellers

Barriers to entry

Control over market price

#15

In a market with a price ceiling set below the equilibrium price, what is likely to occur?

A surplus of the good

A shortage of the good

Equilibrium price will adjust upwards

Equilibrium quantity will decrease