#1
Which of the following would cause an increase in demand?
A decrease in the price of a complementary good
A decrease in consumer income for an inferior good
An increase in the price of a substitute good
A decrease in the price of the good itself
#2
What does the law of demand state?
There is an inverse relationship between price and quantity demanded
There is a direct relationship between price and quantity demanded
The demand curve is upward sloping
Consumers will demand less of a good at higher prices
#3
Which of the following would cause a movement along the demand curve?
A change in consumer income
A change in the price of the good itself
A change in the prices of related goods
A change in consumer preferences
#4
What is the law of supply?
There is a direct relationship between price and quantity supplied
There is an inverse relationship between price and quantity supplied
The supply curve is upward sloping
Suppliers will supply less of a good at higher prices
#5
What is the difference between a movement along the supply curve and a shift of the supply curve?
A movement along the curve is caused by a change in price, while a shift is caused by a change in factors other than price
A movement along the curve is caused by a change in factors other than price, while a shift is caused by a change in price
A movement along the curve represents a change in quantity supplied, while a shift represents a change in supply
A movement along the curve represents a change in supply, while a shift represents a change in quantity supplied
#6
If supply increases while demand remains constant, what will happen to equilibrium price and quantity?
Price will decrease, quantity will increase
Price will increase, quantity will decrease
Price and quantity will both increase
Price and quantity will both decrease
#7
What does the concept of elasticity of demand measure?
The slope of the demand curve
The responsiveness of quantity demanded to a change in price
The change in consumer preferences over time
The relationship between demand and supply
#8
If demand decreases while supply remains constant, what will happen to equilibrium price and quantity?
Price will decrease, quantity will increase
Price will increase, quantity will decrease
Price and quantity will both decrease
Price and quantity will both increase
#9
What is a perfectly elastic demand curve?
A vertical demand curve
A horizontal demand curve
A steeply sloped demand curve
A flat demand curve
#10
If both demand and supply increase, what will happen to equilibrium price and quantity?
Price will increase, quantity may increase or decrease depending on the magnitude of change
Price and quantity will both increase
Price will decrease, quantity will increase
Price will decrease, quantity will decrease
#11
What is the effect of a binding price floor in a market?
It creates a surplus of the good
It creates a shortage of the good
It has no effect on the market equilibrium
It shifts the demand curve to the left
#12
In the long run, what can firms do to adjust to changes in market conditions?
Change the number of firms in the industry
Alter the technology used in production
Adjust the quantity of resources employed
All of the above
#13
What happens to the price of a good when both demand and supply decrease?
Price increases
Price decreases
Price may increase or decrease depending on the magnitude of change
Price remains constant
#14
What happens to the equilibrium price and quantity if both demand and supply decrease, but the decrease in supply is greater than the decrease in demand?
Price increases, quantity decreases
Price decreases, quantity decreases
Price increases, quantity increases
Price decreases, quantity increases
#15
What is a price ceiling, and what is its impact on the market?
A price ceiling sets a maximum price that sellers can charge, leading to excess demand
A price ceiling sets a minimum price that sellers can charge, leading to excess supply
A price ceiling sets a maximum price that buyers can pay, leading to excess supply
A price ceiling sets a minimum price that buyers can pay, leading to excess demand