#1
What is the term used to describe a situation where the quantity demanded exceeds the quantity supplied at a given price?
Equilibrium
Surplus
Shortage
Elasticity
#2
What does the law of demand state?
As the price of a good increases, the quantity demanded decreases
As the price of a good increases, the quantity demanded increases
As the price of a good decreases, the quantity demanded decreases
As the price of a good decreases, the quantity demanded increases
#3
What is the term used to describe a situation where the quantity supplied exceeds the quantity demanded at a given price?
Equilibrium
Shortage
Surplus
Elasticity
#4
Which of the following is NOT a determinant of demand?
Consumer preferences
Price of the product
Income of consumers
Price of inputs
#5
What would cause a movement along the demand curve rather than a shift?
Change in consumer preferences
Change in the price of the good
Change in income
Change in the price of a substitute good
#6
What is the relationship between price and quantity supplied according to the law of supply?
As price increases, quantity supplied decreases
As price increases, quantity supplied remains constant
As price increases, quantity supplied increases
There is no relationship between price and quantity supplied
#7
What happens to the equilibrium price and quantity when demand increases and supply decreases?
Equilibrium price increases; equilibrium quantity decreases
Equilibrium price decreases; equilibrium quantity decreases
Equilibrium price increases; equilibrium quantity increases
Equilibrium price decreases; equilibrium quantity increases
#8
Which of the following factors would likely cause a rightward shift in the supply curve?
Increase in production costs
Decrease in the number of producers
Technological advancements
Decrease in consumer income
#9
Which of the following factors is likely to cause a leftward shift in the demand curve for a product?
Increase in consumer income
Decrease in the price of a complementary good
Expectation of future price decrease
Increase in the price of a substitute good
#10
What is the price elasticity of demand formula?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Absolute change in quantity demanded / Absolute change in price
Absolute change in price / Absolute change in quantity demanded
#11
What is the effect of an increase in supply on equilibrium price and quantity?
Equilibrium price decreases; equilibrium quantity decreases
Equilibrium price increases; equilibrium quantity decreases
Equilibrium price decreases; equilibrium quantity increases
Equilibrium price increases; equilibrium quantity increases
#12
What is the term used to describe the measure of responsiveness of quantity demanded to a change in price?
Price elasticity of demand
Income elasticity of demand
Cross-price elasticity of demand
Price elasticity of supply
#13
In the market for apples, if the price of oranges (a substitute for apples) increases, what happens to the equilibrium price and quantity of apples?
Equilibrium price increases; equilibrium quantity increases
Equilibrium price decreases; equilibrium quantity increases
Equilibrium price increases; equilibrium quantity decreases
Equilibrium price decreases; equilibrium quantity decreases
#14
What is the likely effect of a decrease in consumer income on the market for luxury cars?
Equilibrium price increases; equilibrium quantity decreases
Equilibrium price decreases; equilibrium quantity decreases
Equilibrium price increases; equilibrium quantity increases
Equilibrium price decreases; equilibrium quantity increases
#15
If the cross-price elasticity of demand between two goods is positive, what type of goods are they?
Complementary goods
Normal goods
Inferior goods
Substitute goods
#16
If the demand for a good is perfectly elastic, what does this imply about the price elasticity of demand?
It is equal to 1
It is greater than 1
It is less than 1
It is equal to infinity
#17
If the income elasticity of demand for a good is negative, what type of good is it?
Normal good
Inferior good
Luxury good
Complementary good
#18
If the cross-price elasticity of demand between two goods is negative, what type of goods are they?
Complementary goods
Normal goods
Inferior goods
Substitute goods