Demand and Supply: Interactive Learning Quizzes for Economics Students

Question 1

Which of the following would result in a decrease in the demand for a certain product?

Accepted Answer

A shift in consumer preferences away from the product

Answer

An increase in consumer income

Answer

A decrease in the price of the product

Answer

Technological advancements that make the product cheaper to manufacture

Question 2

At market equilibrium:

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Quantity demanded exceeds quantity supplied

Answer

Quantity supplied exceeds quantity demanded

Answer

Price falls below the equilibrium price

Question 3

Which factor contributes to an increase in the price elasticity of demand for a product?

Accepted Answer

The existence of close substitutes

Answer

A high proportion of fixed costs in production

Answer

Low elasticity of income demand

Answer

A short time period considered

Question 4

A completely inelastic demand curve is characterized by:

Accepted Answer

A slope of infinity

Answer

A slope of zero

Answer

A negative slope

Answer

A positive slope

Question 5

Consumer surplus refers to the:

Accepted Answer

Region below the demand curve and above the price line

Answer

Region below the supply curve and above the price line

Answer

Region above the demand curve and below the price line

Answer

Region above the supply curve and below the price line

Question 6

A price ceiling is a government-imposed:

Accepted Answer

Maximum price for a good

Answer

Minimum price for a good

Answer

Maximum quantity to be produced

Answer

Minimum quantity to be consumed

Question 7

Which assumption underpins the law of demand?

Accepted Answer

Other factors remain constant

Answer

Consumers are rational and utility-maximizing

Answer

Prices are fixed

Answer

Incomes remain unaffected by price changes

Question 8

Which of the following is NOT a factor that can cause a shift in the demand curve for a good?

Accepted Answer

Change in production costs

Answer

Change in consumer income

Answer

Change in consumer tastes and preferences

Answer

Change in population size

Question 9

What happens to the equilibrium price when the supply of a good decreases, all else held constant?

Accepted Answer

Price increases

Answer

Price decreases

Answer

Price remains the same

Answer

It is impossible to determine

Question 10

What is the area below the supply curve and above the price line called?

Accepted Answer

Producer surplus

Answer

Consumer surplus

Answer

Total surplus

Answer

Market equilibrium

Question 11

Which of the following is a major assumption of the law of demand?

Accepted Answer

Other factors influencing demand remain constant

Answer

Consumers are rational decision-makers

Answer

Goods are perfect complements

Answer

The price of the good is the only factor that affects demand

Question 12

What is the difference between a price ceiling and a price floor?

Accepted Answer

A price ceiling sets a maximum price, while a price floor sets a minimum price

Answer

A price floor sets a maximum price, while a price ceiling sets a minimum price

Answer

They both set the same price in the market

Answer

They are not related to market equilibrium

Question 13

Which of the following is a potential consequence of a price ceiling?

Accepted Answer

Shortage of the good

Answer

Surplus of the good

Answer

No impact on the market

Answer

Increase in consumer surplus

Question 14

What happens to total surplus when a positive externality is introduced in a market?

Accepted Answer

Total surplus increases

Answer

Total surplus decreases

Answer

Total surplus remains unchanged

Answer

It depends on the elasticity of demand and supply

Question 15

According to the law of demand, how does a decrease in the price of a good affect the quantity demanded?

Accepted Answer

Increases the quantity demanded.

Answer

Decreases the quantity demanded.

Answer

Does not change the quantity demanded.

Answer

Decreases the supply.

Question 16

Which factor is most likely to result in a higher elasticity of supply for a product?

Accepted Answer

Availability of substitute inputs

Answer

High fixed costs of production

Answer

Government price controls

Answer

Long production time

Question 17

What are the potential consequences of implementing a price floor in a market?

Accepted Answer

Higher market equilibrium price and lower quantity supplied

Answer

Increased consumer surplus and decreased producer surplus

Answer

Increased quantity demanded and reduced market equilibrium quantity

Answer

No impact on consumer or producer surplus

Question 18

If the price of a good increases and the quantity demanded decreases, then the demand curve is:

Accepted Answer

Downward-sloping

Answer

Upward-sloping

Answer

Horizontal

Answer

Vertical

Question 19

When the supply of a good increases and the price decreases, it indicates that the supply curve is:

Accepted Answer

Downward-sloping

Answer

Upward-sloping

Answer

Horizontal

Answer

Vertical

Question 20

Which of the following is a key determinant of market equilibrium?

Accepted Answer

Equal quantity supplied and demanded

Answer

Fixed price

Answer

Government intervention

Answer

Consumer preferences

Question 21

Which of the following is an example of a consumer surplus?

Accepted Answer

The difference between the price consumers are willing to pay and the actual price they pay

Answer

The difference between the price producers are willing to sell at and the actual price they sell at

Answer

The total revenue earned by producers

Answer

The total expenditure incurred by consumers

Question 22

What is the primary purpose of a price elasticity coefficient?

Accepted Answer

To measure the responsiveness of quantity demanded to changes in price

Answer

To predict future price trends

Answer

To determine the optimal price for a product

Answer

To eliminate market inefficiencies

Question 23

What is the impact of an increase in production costs on the supply curve?

Accepted Answer

It shifts to the left

Answer

It shifts to the right

Answer

It becomes steeper

Answer

It becomes flatter

Question 24

Which of the following government policies typically aims to increase the supply of a good?

Accepted Answer

Subsidies

Answer

Price controls

Answer

Taxes

Answer

Quotas

Question 25

Which of the following is NOT a determinant of demand?

Accepted Answer

Supply of the good

Answer

Consumer preferences

Answer

Income

Answer

Price of the good

Question 26

When the supply of a good increases but the demand remains constant, what will happen to the market price?

Accepted Answer

Decrease

Answer

Increase

Answer

Stay the same

Answer

Fluctuate randomly

Question 27

The elasticity of demand measures the responsiveness of quantity demanded to changes in:

Accepted Answer

Price

Answer

Income

Answer

Advertising

Answer

Consumer preferences

Question 28

Which of the following is a characteristic of a perfectly inelastic demand curve?

Accepted Answer

Slope is vertical

Answer

Slope is horizontal

Answer

Slope is negative

Answer

Slope is positive

Question 29

The equilibrium price is the price at which:

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Quantity demanded exceeds quantity supplied

Answer

Quantity supplied exceeds quantity demanded

Answer

There is no demand for the good

Question 30

An increase in the price of a complementary good will:

Accepted Answer

Decrease the demand for the original good

Answer

Increase the demand for the original good

Answer

Have no effect on the demand for the original good

Answer

Make the demand for the original good perfectly elastic

Question 31

The cross-price elasticity of demand measures the responsiveness of:

Accepted Answer

Quantity demanded of one good to a change in the price of another good

Answer

Quantity supplied of one good to a change in the price of another good

Answer

Price of one good to a change in the quantity demanded of another good

Answer

Price of one good to a change in the quantity supplied of another good

Question 32

Government price controls are most likely to result in:

Accepted Answer

Shortages

Answer

Surpluses

Answer

Equilibrium

Answer

Increased demand

Question 33

Which of the following factors would cause a leftward shift in the demand curve?

Accepted Answer

Introduction of a close substitute good

Answer

Increase in consumer income

Answer

Decrease in the price of the good

Answer

Increase in consumer tastes and preferences for the good

Question 34

According to the law of supply, when the price of a good increases, what happens to the quantity supplied?

Accepted Answer

Increases

Answer

Decreases

Answer

Remains unchanged

Answer

Fluctuates randomly

Question 35

At the equilibrium point in a market, the quantity demanded is equal to:

Accepted Answer

The quantity supplied

Answer

Zero

Answer

The maximum possible quantity

Answer

The minimum possible quantity

Question 36

Which of the following is NOT a determinant of price elasticity of demand?

Accepted Answer

Number of buyers in the market

Answer

Availability and closeness of substitute goods

Answer

Proportion of income spent on the good

Answer

Time period being considered

Question 37

Consumer surplus refers to the difference between the:

Accepted Answer

Price consumers are willing to pay and the price they actually pay

Answer

Price consumers pay and the price producers receive

Answer

Quantity consumers demand and the quantity producers supply

Answer

Quantity producers supply and the quantity consumers demand

Question 38

If a price ceiling is set below the equilibrium price in a market, what is the likely outcome?

Accepted Answer

Excess demand

Answer

Excess supply

Answer

No change in quantity

Answer

Increased producer surplus

Question 39

Which of the following is NOT a role of demand and supply in a market economy?

Accepted Answer

Protecting the environment

Answer

Determining prices

Answer

Allocating resources

Answer

Promoting technological advancements

Question 40

The concept of consumer sovereignty suggests that:

Accepted Answer

Consumers have the ultimate power to determine what is produced in a market economy

Answer

Producers have complete control over the market

Answer

Government intervention is necessary to protect consumers from market failures

Answer

Demand and supply are irrelevant in a market economy

Question 41

In a market where demand exceeds supply, the equilibrium price will tend to:

Accepted Answer

Rise

Answer

Fall

Answer

Remain constant

Answer

Fluctuate erratically

Question 42

Which of the following is a key determinant of the price elasticity of demand for a product?

Accepted Answer

Availability of close substitutes

Answer

Government policy

Answer

Technological advancements

Answer

Consumer income

Question 43

A tax on the purchase of a good will most likely result in:

Accepted Answer

A reduction in consumer surplus

Answer

An increase in producer surplus

Answer

No change in market efficiency

Answer

An increase in market demand

Question 44

Which of the following will lead to a rightward shift of the demand curve for a normal good?

Accepted Answer

An increase in consumer income

Answer

An increase in the price of a substitute good

Answer

A decrease in the number of consumers

Answer

A decrease in consumer tastes and preferences

Question 45

In a perfectly competitive market, a profit-maximizing firm's output level is determined by the point where:

Accepted Answer

Marginal cost equals marginal revenue

Answer

Marginal cost equals zero

Answer

Marginal revenue equals zero

Answer

Average cost equals average revenue

Question 46

A market shortage occurs when:

Accepted Answer

Quantity demanded exceeds quantity supplied

Answer

Quantity supplied exceeds quantity demanded

Answer

Price is too high

Answer

Government intervention is present

Question 47

In a monopoly market structure, the producer typically has:

Accepted Answer

Significant control over both price and quantity

Answer

Equal control with consumers over price and quantity

Answer

No control over price or quantity

Answer

Limited control over price but not quantity

Question 48

Which of the following is a determinant of price elasticity of demand?

Accepted Answer

Availability of close substitutes

Answer

Producer surplus

Answer

Consumer income

Answer

Government regulations

Question 49

In a perfectly competitive market, the demand curve represents the sum of all individual:

Accepted Answer

Demand curves

Answer

Indifference curves

Answer

Isoquants

Answer

Supply curves

Question 50

Which of the following is **not** a factor affecting consumer surplus?

Accepted Answer

Government subsidies

Answer

Market price

Answer

Consumer demand

Answer

Consumer income

Question 51

The point where the demand and supply curves intersect is known as:

Accepted Answer

Market equilibrium

Answer

Producer surplus

Answer

Optimal quantity

Answer

Consumer surplus

Question 52

If the demand for a product is inelastic, what is the impact of a price increase on total revenue?

Accepted Answer

Total revenue will increase

Answer

Total revenue will decrease

Answer

Indeterminate effect on total revenue

Answer

Total revenue will remain constant