#1
Which of the following will cause an increase in the demand for a product?
A decrease in the price of a complementary good
An increase in the price of the product
A decrease in consumer income
A decrease in the price of the product
#2
In a market where supply and demand are in equilibrium, what is true?
Quantity supplied exceeds quantity demanded
Price is higher than equilibrium price
Quantity demanded exceeds quantity supplied
There is no shortage or surplus
#3
Which of the following is NOT a factor that can shift the demand curve?
Changes in consumer preferences
Changes in the price of related goods
Changes in technology
Changes in consumer income
#4
What is the law of demand?
As price decreases, quantity demanded decreases
As price decreases, quantity demanded increases
As price increases, quantity supplied decreases
As price increases, quantity demanded decreases
#5
What is the law of supply?
As price increases, quantity supplied decreases
As price increases, quantity supplied increases
As price decreases, quantity demanded decreases
As price decreases, quantity supplied increases
#6
What is a market equilibrium?
A situation where quantity supplied exceeds quantity demanded
A situation where quantity demanded exceeds quantity supplied
A situation where supply and demand are balanced
A situation where there is no government intervention in the market
#7
If the supply of a product decreases while demand remains constant, what will happen to the equilibrium price and quantity?
Price will decrease and quantity will increase
Price will decrease and quantity will decrease
Price will increase and quantity will decrease
Price will increase and quantity will increase
#8
What is the likely effect on the market for gasoline if a new technology greatly improves fuel efficiency in cars?
Decrease in demand and increase in supply
Increase in demand and decrease in supply
Decrease in both demand and supply
Increase in both demand and supply
#9
What happens to the equilibrium price and quantity if both demand and supply increase?
Price increases, quantity decreases
Price decreases, quantity increases
Price and quantity both increase
Price and quantity both decrease
#10
What does a price ceiling set below the equilibrium price cause in a market?
A surplus
A shortage
An increase in supply
A decrease in demand
#11
Which of the following is NOT a determinant of demand?
Consumer income
Price of the good itself
Price of related goods
Technology
#12
What happens to equilibrium price and quantity if there is a decrease in both demand and supply?
Price decreases, quantity increases
Price increases, quantity decreases
Price and quantity both decrease
Price and quantity both increase
#13
What is the difference between a movement along the demand curve and a shift in the demand curve?
A movement is caused by a change in price, while a shift is caused by a change in other factors
A movement is caused by a change in other factors, while a shift is caused by a change in price
There is no difference, they both refer to changes in price
There is no difference, they both refer to changes in other factors
#14
What is the concept of elasticity of demand?
It measures how much the quantity demanded changes in response to a change in price
It measures how much the quantity supplied changes in response to a change in price
It measures how much the demand curve shifts
It measures the total revenue in a market
#15
What is a price floor and what effect does it have on a market?
It is a government-imposed minimum price and it causes a surplus
It is a government-imposed maximum price and it causes a shortage
It is a government-imposed minimum price and it causes a shortage
It is a government-imposed maximum price and it causes a surplus
#16
Which of the following is a determinant of supply?
Consumer preferences
Technology
Taxes
Consumer income
#17
When does a market reach allocative efficiency?
When demand equals supply
When the marginal benefit equals the marginal cost
When there is no government intervention
When there is a perfectly competitive market
#18
If the demand for a good is inelastic and the price increases, what happens to total revenue?
Increases
Decreases
Remains constant
Can't be determined
#19
What effect will an increase in the price of a substitute good have on the demand for the original good?
Increase in demand
Decrease in demand
No effect on demand
Increase in supply
#20
What happens to the equilibrium price and quantity if there is an increase in supply and a decrease in demand?
Price increases, quantity decreases
Price decreases, quantity increases
Price and quantity both decrease
Price and quantity both increase
#21
What is the difference between a normal good and an inferior good?
Normal goods have an elastic demand, while inferior goods have an inelastic demand
Normal goods have an inelastic demand, while inferior goods have an elastic demand
Normal goods are luxury items, while inferior goods are necessities
Normal goods are necessities, while inferior goods are luxury items
#22
What happens to equilibrium price and quantity if there is an increase in both demand and supply?
Price increases, quantity decreases
Price decreases, quantity increases
Price and quantity both increase
Price and quantity both decrease
#23
What is the income elasticity of demand?
It measures the responsiveness of quantity demanded to changes in consumer income
It measures the responsiveness of quantity demanded to changes in price
It measures the responsiveness of quantity supplied to changes in price
It measures the responsiveness of quantity supplied to changes in consumer income
#24
What is a perfectly elastic demand?
When the quantity demanded is extremely responsive to changes in price
When the quantity demanded is not responsive to changes in price
When the quantity demanded is completely unresponsive to changes in price
When the quantity demanded is perfectly stable regardless of price changes