#1
Which of the following best describes economic equilibrium?
A state where demand exceeds supply
A state where supply exceeds demand
A state of balance between supply and demand
A state of constant change in prices
#2
What happens to price and quantity when there is excess demand in a market?
Price decreases and quantity increases
Price increases and quantity decreases
Price increases and quantity increases
Price decreases and quantity decreases
#3
What is the relationship between the price and quantity supplied in a competitive market?
There is a direct relationship
There is an inverse relationship
There is no relationship
It depends on the elasticity of supply
#4
What is the term used to describe a situation where the quantity demanded equals the quantity supplied?
Market surplus
Market shortage
Market equilibrium
Market disequilibrium
#5
What is the main assumption underlying the law of demand?
Consumers always make rational decisions
There are no substitutes for the good
Consumers have unlimited income
Ceteris paribus
#6
What does a downward sloping demand curve indicate?
An increase in demand
A decrease in demand
An increase in quantity demanded
A decrease in quantity demanded
#7
Which of the following is not a determinant of demand?
Price of the product
Income of the consumers
Price of related goods
Cost of production
#8
What does the law of supply state?
As price decreases, quantity supplied increases
As price increases, quantity demanded decreases
As price decreases, quantity demanded decreases
As price increases, quantity supplied decreases
#9
Which of the following is not a characteristic of a perfectly competitive market?
Many buyers and sellers
Homogeneous products
Price discrimination
Perfect information
#10
What effect does an increase in consumer income have on the demand for normal goods?
Demand decreases
Demand increases
Demand remains unchanged
Demand becomes perfectly elastic
#11
Which of the following is a determinant of supply?
Consumer preferences
Price of related goods
Number of sellers
Consumer income
#12
What is the relationship between price elasticity of demand and total revenue?
They move in the same direction
They move in opposite directions
There is no relationship
It depends on the income elasticity of demand
#13
In economics, what is the difference between short-run equilibrium and long-run equilibrium?
Short-run equilibrium is when all factors of production are variable, while long-run equilibrium is when all factors are fixed.
Short-run equilibrium is when prices are fixed, while long-run equilibrium is when prices are flexible.
Short-run equilibrium is when all factors of production are fixed, while long-run equilibrium is when all factors are variable.
Short-run equilibrium is when prices and wages are flexible, while long-run equilibrium is when prices and wages are fixed.
#14
Which of the following is an example of a positive externality?
Pollution from a factory
Education benefiting society
A tax on cigarettes
A subsidy for oil production
#15
What is the impact of a government-imposed price ceiling below the equilibrium price in a market?
A surplus
A shortage
No impact
Equilibrium
#16
What is the concept of deadweight loss in economics?
The loss of revenue experienced by producers
The loss of consumer surplus due to a decrease in demand
The loss of total surplus due to a market inefficiency
The loss of profit experienced by firms
#17
What is the concept of allocative efficiency in economics?
When resources are allocated efficiently across different sectors of the economy
When resources are allocated to produce the combination of goods and services most desired by society
When resources are allocated to produce goods and services at the lowest possible cost
When resources are allocated to achieve the maximum level of total surplus