Understanding Supply and Demand Dynamics Quiz

Challenge yourself with 11 questions on supply, demand, elasticity, and market dynamics in this microeconomics quiz.

Practice Learn Test

Which of the following is a determinant of supply?

Consumer preferences

Government policies

Income of consumers

Price of related goods

What does the law of demand state?

As the price of a good increases, the quantity demanded increases

As the price of a good increases, the quantity demanded decreases

As the price of a good decreases, the quantity demanded increases

As the price of a good decreases, the quantity demanded decreases

What happens to the equilibrium price and quantity when demand increases and supply decreases?

Price increases; quantity decreases

Price decreases; quantity increases

Price decreases; quantity decreases

Price increases; quantity increases

What is the impact on equilibrium price and quantity when both demand and supply increase?

Price increases; quantity decreases

Price decreases; quantity increases

Price increases; quantity increases

Price decreases; quantity decreases

What is the concept of price elasticity of supply?

Measure of responsiveness of quantity demanded to a change in price

Measure of responsiveness of quantity supplied to a change in price

Measure of responsiveness of demand to a change in income

Measure of responsiveness of demand to a change in price

What is a substitute good?

A good that is always consumed together with another good

A good that is consumed in place of another good

A good that has an inverse relationship with the price of another good

A good that has a direct relationship with the price of another good

Which factor does NOT affect the elasticity of demand?

Availability of substitutes

Necessity of the good

Time horizon

Government regulations

In a market with perfectly elastic demand, how does a change in price affect quantity demanded?

Quantity demanded remains constant

Quantity demanded increases significantly

Quantity demanded decreases significantly

Quantity demanded becomes zero

What is the income elasticity of demand for a normal good?

Positive

Negative

Zero

Undefined

#10

In a market with perfectly inelastic supply, how does a change in price affect quantity supplied?

Quantity supplied remains constant

Quantity supplied increases significantly

Quantity supplied decreases significantly

Quantity supplied becomes zero

#11

In a market with perfectly elastic supply, how does a change in price affect quantity supplied?