Supply, Demand, and Government Intervention Quiz

Test your knowledge with questions on price ceilings, floors, taxes, elasticity, market structures, and government policies in microeconomics.

#1

Which of the following is an example of a government-imposed price ceiling?

Minimum wage law
Rent control
Subsidies for farmers
Sales tax
#2

Which of the following is an example of a government-imposed price floor?

Rent control
Minimum wage law
Subsidies for farmers
Sales tax
#3

What is the term used to describe the situation where the quantity demanded exceeds the quantity supplied at the current price level?

Excess supply
Excess demand
Equilibrium
Shortage
#4

Which of the following is not a determinant of supply?

Technology
Consumer preferences
Resource prices
Number of sellers
#5

What is the term used to describe the situation where the price of a good or service is determined solely by the forces of supply and demand without government intervention?

Free market
Planned economy
Mixed economy
Command economy
#6

What is the term used to describe the quantity of a good or service that producers are willing and able to offer for sale at various prices during a given period?

Demand
Supply
Equilibrium
Shortage
#7

Which of the following is a determinant of demand?

Cost of production
Price of related goods
Number of firms in the market
Wages of workers
#8

If the demand for a product decreases while supply remains constant, what is likely to happen to the equilibrium price and quantity?

Price and quantity both increase
Price increases and quantity decreases
Price decreases and quantity increases
Price and quantity both decrease
#9

If the government imposes an excise tax on a good, what typically happens to the equilibrium price and quantity?

Price decreases and quantity decreases
Price decreases and quantity increases
Price increases and quantity decreases
Price increases and quantity increases
#10

Which of the following is a tool used by the government to control the money supply in an economy?

Fiscal policy
Monetary policy
Trade policy
Industrial policy
#11

If the demand for a product is inelastic and its price decreases, what will happen to the total revenue of the producers?

Increase
Decrease
Remain constant
Cannot be determined
#12

What happens to the equilibrium price and quantity in a market if both demand and supply increase?

Price decreases, quantity increases
Price increases, quantity decreases
Price increases, quantity increases
Price decreases, quantity decreases
#13

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

Many buyers and sellers
Product differentiation
Barriers to entry
Control over prices by firms
#14

In which market structure does a single firm dominate the entire market and has the ability to control prices?

Monopolistic competition
Oligopoly
Monopoly
Perfect competition
#15

In a market with perfectly elastic demand, how does a tax imposed by the government affect the equilibrium price and quantity?

Price increases and quantity decreases
Price decreases and quantity increases
Price remains constant and quantity decreases
Price remains constant and quantity increases

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