Demand and Supply: Interactive Learning Quizzes for Sixth Form Economics

Question 1

Which factor will cause the supply curve to shift to the right?

Accepted Answer

Decrease in the cost of production

Answer

Increase in the price of a substitute good

Answer

Increase in the price of a complementary good

Question 2

Which factors influence the elasticity of supply? Explain how production technology, resource availability, and market structure affect suppliers' responsiveness to market changes.

Accepted Answer

Market structure, production technology, and resource availability collectively shape supply elasticity, impacting suppliers' response to demand.

Answer

Production technology alone determines supply elasticity, as it influences output adjustment.

Answer

Resource availability is the sole determinant of supply elasticity, limiting output to available resources.

Answer

Government regulations primarily control supply elasticity by dictating production quantities.

Question 3

Which factors can influence the demand for a product or service?

Accepted Answer

Consumer preferences, income level, advertising campaigns, and availability of substitutes

Answer

Consumer preferences and income level only

Answer

Advertising campaigns have no impact on demand

Answer

Availability of substitutes is only relevant for perfect substitutes

Question 4

How does behavioral economics help us understand consumer decision-making?

Accepted Answer

It explains why consumers sometimes make seemingly irrational decisions.

Answer

It assumes rational decision-making, excluding emotions and social factors.

Answer

It relies heavily on complex mathematical models to predict consumer behavior.

Answer

It has no practical applications in marketing.

Question 5

What is the impact of a decrease in the price of a substitute good on demand for the original good?

Accepted Answer

Decreases demand for the original good.

Answer

Increases demand for the substitute good.

Answer

Has no effect on demand for the original good.

Answer

Creates a consumer surplus.

Question 6

A price ceiling set below the equilibrium price by the government will result in:

Accepted Answer

A shortage.

Answer

A surplus.

Answer

No change in market equilibrium.

Answer

Increased consumer satisfaction.

Question 7

What causes a rightward shift in the supply curve?

Accepted Answer

Technological advancements

Answer

Increased production costs

Answer

Natural disasters

Answer

Government subsidies to consumers

Question 8

According to the law of demand, as price increases:

Accepted Answer

Quantity demanded decreases.

Answer

Quantity demanded also increases.

Answer

Quantity supplied increases.

Answer

Price and quantity demanded are unrelated.

Question 9

What is the result of a decrease in supply on market equilibrium?

Accepted Answer

Increase in price and decrease in quantity supplied

Answer

Decrease in price and increase in quantity supplied

Answer

No change in price or quantity supplied

Answer

Increase in price and no change in quantity supplied

Question 10

Which factor can cause a shift to the left in the supply curve?

Accepted Answer

Increased costs of production

Answer

Government subsidies

Answer

Technological advancements

Answer

Strengthening of the domestic currency

Question 11

Which assumption is fundamental to the law of demand?

Accepted Answer

Other factors affecting demand remain unchanged

Answer

Consumers make rational decisions

Answer

Goods are perfect substitutes

Answer

Income is constant

Question 12

Which of the following is an example of an externality?

Accepted Answer

Pollution from industrial activities

Answer

Increased property values due to a new park

Answer

Higher production costs caused by government regulations

Answer

A technological innovation that benefits everyone

Question 13

What is the primary consequence of an increase in the supply of a good or service?

Accepted Answer

Increase in equilibrium quantity

Answer

Decrease in equilibrium price

Answer

Increase in equilibrium price

Answer

Decrease in equilibrium quantity

Question 14

What is the economic term used to describe the behavior of consumers who substitute cheaper alternatives when prices rise?

Accepted Answer

Substitution effect

Answer

Income effect

Answer

Producer effect

Answer

Market effect

Question 15

According to the law of demand, as the price of a good increases, the quantity demanded:

Accepted Answer

Decreases

Answer

Increases

Answer

Remains the same

Answer

May increase or decrease

Question 16

A price ceiling is a government regulation that sets a:

Accepted Answer

Maximum price for a good

Answer

Minimum price for a good

Answer

Fixed price for a good

Answer

Subsidy for the production of a good

Question 17

What is the most likely effect of a price ceiling set below the equilibrium price?

Accepted Answer

Shortage

Answer

Surplus

Answer

No change in equilibrium

Answer

Infinite demand

Question 18

Elasticity measures:

Accepted Answer

The responsiveness of one variable to changes in another variable.

Answer

The slope of a demand or supply curve.

Answer

The equilibrium price and quantity in a market.

Answer

The total revenue generated from a product.

Question 19

In a perfectly competitive market, the individual firm is a:

Accepted Answer

Price taker.

Answer

Price maker.

Answer

Monopolist.

Answer

Duopolist.

Question 20

The point of intersection between the demand curve and supply curve represents:

Accepted Answer

Equilibrium

Answer

Disequilibrium

Answer

Surplus

Answer

Shortage

Question 21

Which of the following is NOT a determinant of consumer demand?

Accepted Answer

Number of producers in the market

Answer

Consumer tastes and preferences

Answer

Price of the good

Answer

Income of consumers

Question 22

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

Accepted Answer

It increases.

Answer

It decreases.

Answer

It remains the same.

Answer

It becomes unstable.

Question 23

Which government intervention can shift the supply curve to the right?

Accepted Answer

Subsidies to producers

Answer

Taxes on producers

Answer

Price ceilings

Answer

Quotas

Question 24

Which of the following is an assumption of the basic supply and demand model?

Accepted Answer

Perfect competition

Answer

Government intervention

Answer

Differentiated products

Answer

Irrational consumers and producers

Question 25

What is the concept of elasticity?

Accepted Answer

The responsiveness of one variable to changes in another variable.

Answer

The slope of the demand curve at a specific point.

Answer

The difference between quantity demanded and quantity supplied.

Answer

The point where demand and supply intersect.

Question 26

Which of the following factors does NOT affect the price elasticity of demand?

Accepted Answer

Number of producers in the market

Answer

Availability of close substitutes

Answer

Importance of the good in the consumer's budget

Answer

Time period considered

Question 27

What is the primary purpose of a price ceiling?

Accepted Answer

Protect consumers from high prices

Answer

Increase the supply of a product

Answer

Decrease government revenue

Answer

Eliminate product surpluses

Question 28

Which graphical representation illustrates the law of diminishing marginal utility?

Accepted Answer

A downward-sloping line

Answer

An upward-sloping line

Answer

A U-shaped curve

Answer

A bell-shaped curve

Question 29

How does a price increase affect producer surplus?

Accepted Answer

Increases

Answer

Decreases

Answer

No change

Answer

Becomes negative

Question 30

What could cause a shift in the supply curve to the left?

Accepted Answer

An increase in input costs

Answer

An increase in the number of producers

Answer

A technological advancement

Answer

An increase in government subsidies

Question 31

What does the elasticity of demand measure?

Accepted Answer

The responsiveness of demand to changes in price

Answer

The slope of the supply curve

Answer

The availability of substitutes for the good

Answer

The price elasticity of demand

Question 32

What does the cross-price elasticity of demand measure?

Accepted Answer

The responsiveness of demand for a good to changes in the price of a substitute good

Answer

The responsiveness of demand for a good to changes in the price of a complementary good

Answer

The responsiveness of supply for a good to changes in the price of a substitute good

Answer

The responsiveness of supply for a good to changes in the price of a complementary good

Question 33

When is a market said to be perfectly competitive?

Accepted Answer

When there are numerous buyers and sellers

Answer

When products are differentiated

Answer

When barriers to entry and exit are high

Answer

When government intervention is extensive

Question 34

Which market structure features numerous small businesses selling identical products, with minimal barriers to entry and exit?

Accepted Answer

Perfect competition

Answer

Monopoly

Answer

Oligopoly

Question 35

Which of the following is NOT a factor that influences the demand for a good?

Accepted Answer

Government regulations

Answer

Price of the good

Answer

Income of consumers

Answer

Tastes and preferences of consumers

Question 36

An increase in the price of a complementary good will:

Accepted Answer

Decrease the demand for the good

Answer

Increase the demand for the good

Answer

Increase the supply of the good

Answer

Decrease the supply of the good

Question 37

Market equilibrium is achieved when:

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Price is at its maximum

Answer

Consumers are maximizing their utility

Answer

Producers are maximizing their profits

Question 38

A decrease in the cost of production will:

Accepted Answer

Increase the supply of the good

Answer

Decrease the supply of the good

Answer

Increase the demand for the good

Answer

Decrease the demand for the good

Question 39

Producer surplus occurs when:

Accepted Answer

The market price is above the producer's cost of production

Answer

The market price is below the producer's cost of production

Answer

The producer is making a loss

Answer

The consumer is maximizing their utility

Question 40

A technological advancement reduces the production costs of a particular good. Analyze the long-run impact of this change on the market for this good using demand and supply curves.

Accepted Answer

Supply curve shifts right, price falls, consumer surplus increases.

Answer

Supply curve shifts left, price falls, consumer surplus increases.

Answer

Demand curve shifts right, price rises, consumer surplus decreases.

Answer

Demand curve shifts left, price falls, consumer surplus decreases.

Question 41

A decrease in consumer income will cause a:

Accepted Answer

Decrease in quantity demanded

Answer

Increase in quantity supplied

Answer

Increase in quantity demanded

Question 42

Which of the following would cause a shift in the supply curve to the right, increasing the quantity supplied at each price?

Accepted Answer

Technological advancement

Answer

Increase in input costs

Answer

Natural disaster

Answer

Imposition of price ceiling

Question 43

At equilibrium in a perfectly competitive market, the:

Accepted Answer

Quantity demanded equals quantity supplied.

Answer

Price is above the equilibrium price.

Answer

Quantity demanded is greater than quantity supplied.

Answer

Supply curve intersects the demand curve at its highest point.

Question 44

A price ceiling below the equilibrium price will result in:

Accepted Answer

Shortage

Answer

Surplus

Answer

No change in quantity supplied or demanded

Answer

Increase in both quantity supplied and demanded

Question 45

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

Accepted Answer

Horizontal

Answer

Vertical

Answer

Upward sloping

Answer

Downward sloping

Question 46

An increase in demand will:

Accepted Answer

Shift the demand curve to the right, increasing the quantity demanded at each price.

Answer

Shift the demand curve to the left.

Answer

Shift the supply curve to the right.

Answer

Shift the supply curve to the left.

Question 47

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer tastes and preferences

Answer

Price of inputs

Answer

Number of producers

Answer

Technology

Question 48

What is the effect of setting a price ceiling below the market equilibrium price?

Accepted Answer

Creating a shortage

Answer

Creating a surplus

Answer

Disequilibrium

Question 49

Which of the following will shift the demand curve for a good to the right?

Accepted Answer

An increase in consumer income

Answer

A decrease in consumer expectations about future prices

Answer

An increase in the price of the good

Answer

An increase in the price of a substitute good

Question 50

If the government imposes a price ceiling below the equilibrium price, what is the likely outcome?

Accepted Answer

A shortage

Answer

A surplus

Answer

Increased production

Answer

No change in the market equilibrium

Question 51

Which of the following is an example of a price elasticity of demand of -0.5?

Accepted Answer

A 10% increase in price leads to a 5% decrease in quantity demanded

Answer

A 10% decrease in price leads to a 5% increase in quantity demanded

Answer

A 5% increase in price leads to a 5% increase in quantity demanded

Question 52

Which of the following can lead to a market failure?

Accepted Answer

Externalities

Answer

Efficient production

Answer

Consumer sovereignty

Answer

Equilibrium

Question 53

If the government grants a subsidy on a particular good, what is the likely outcome?

Accepted Answer

An increase in the supply of that good

Answer

No effect on the supply of that good

Answer

A decrease in demand for that good

Answer

A decrease in the supply of that good

Question 54

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

Accepted Answer

Numerous buyers and sellers

Answer

Market power

Answer

Differentiated products

Answer

High barriers to entry

Question 55

What is the equilibrium price?

Accepted Answer

The price at which the quantity supplied is equal to the quantity demanded

Answer

The lowest price that producers are willing to accept

Answer

The highest price that consumers are willing to pay

Question 56

Which of the following is NOT a determinant of demand?

Accepted Answer

Technological advancements in input production

Answer

Income of consumers

Answer

Consumer tastes and preferences

Question 57

A decrease in consumer income will most likely lead to:

Accepted Answer

A leftward shift in the demand curve

Answer

A rightward shift in the demand curve

Answer

An upward shift in the supply curve

Answer

A downward shift in the supply curve

Question 58

At market equilibrium, the quantity demanded is equal to the:

Accepted Answer

Quantity supplied

Answer

Price of the commodity

Answer

Consumer surplus

Question 59

The elasticity of demand measures the responsiveness of:

Accepted Answer

Quantity demanded to price changes

Answer

Price to quantity supplied changes

Answer

Price to quantity demanded changes

Answer

Quantity supplied to price changes

Question 60

A movement along the demand curve is caused by a change in:

Accepted Answer

Price of the commodity

Answer

Number of buyers in the market

Answer

Income of consumers

Answer

Consumer tastes and preferences

Question 61

The law of diminishing marginal utility states that as consumers consume more of a good or service:

Accepted Answer

The additional satisfaction they receive from each additional unit decreases

Answer

The total satisfaction they receive increases at a constant rate

Answer

The additional satisfaction they receive from each additional unit increases

Question 62

Which of the following government interventions is likely to result in an increase in the quantity supplied?

Accepted Answer

Subsidies for producers

Answer

Taxes on producers

Answer

Production quotas

Answer

Price ceilings

Question 63

What is the relationship between the price of a good and the quantity demanded?

Accepted Answer

Inverse or negative

Answer

Depends on the type of good

Answer

Direct or positive

Answer

Unrelated or non-linear

Question 64

What is the primary effect of a price ceiling on a market?

Accepted Answer

Creates a shortage

Answer

Creates a surplus

Answer

Has no effect on market equilibrium