#1
What does the law of demand state?
As price decreases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded
#2
What is the law of supply?
As price increases, quantity supplied increases
ExplanationDirect relationship between price and quantity supplied
#3
What is a price ceiling?
A legal maximum price above which a good or service cannot be sold
ExplanationGovernment-imposed limit on prices
#4
What is the cross-price elasticity of demand?
The measure of responsiveness of quantity demanded to a change in price of a related good
ExplanationDegree of substitution between related goods
#5
What is the concept of elasticity of substitution?
The measure of how easily factors of production can be substituted for each other
ExplanationAbility to replace one factor with another in production
#6
Which of the following factors can cause a shift in the demand curve?
All of the above
ExplanationVarious factors including income, preferences, and expectations
#7
What is elasticity of demand?
The measure of responsiveness of quantity demanded to a change in price
ExplanationDegree of sensitivity of demand to price changes
#8
Which of the following factors can cause a shift in the supply curve?
All of the above
ExplanationVarious factors including technology, input prices, and expectations
#9
What is the concept of market equilibrium?
When quantity supplied equals quantity demanded
ExplanationBalance point of supply and demand
#10
What is a determinant of price elasticity of demand?
All of the above
ExplanationFactors including substitutes availability, necessity, and time
#11
What is consumer surplus?
The difference between the maximum price consumers are willing to pay and the market price
ExplanationExtra benefit consumers gain from paying less than they're willing to
#12
What happens to equilibrium price and quantity if there is an increase in both demand and supply?
Price increases, quantity increases
ExplanationSimultaneous increase in demand and supply leads to higher price and quantity
#13
What is the difference between a movement along the demand curve and a shift in the demand curve?
A movement along the demand curve is caused by changes in price, while a shift is caused by factors other than price
ExplanationPrice change versus changes in other factors affecting demand
#14
What is price elasticity of supply?
The measure of responsiveness of quantity supplied to a change in price
ExplanationSensitivity of supply to price changes
#15
What factors can affect the elasticity of supply?
All of the above
ExplanationFactors including production time, resource availability, and mobility
#16
What is producer surplus?
The difference between the minimum price producers are willing to accept and the market price
ExplanationAdditional profit producers receive by selling for more than they're willing to accept
#17
What is the deadweight loss?
The total loss in consumer and producer surplus due to a market inefficiency
ExplanationLoss of efficiency caused by market interventions