Supply and Demand: Interactive Learning Quizzes for Economics Students

Question 1

According to the law of supply, what happens to the quantity supplied as price increases?

Accepted Answer

Increases

Answer

Decreases

Answer

Remains constant

Answer

Fluctuates randomly

Question 2

What is the term for a situation where the quantity supplied exceeds the quantity demanded?

Accepted Answer

Surplus

Answer

Shortage

Answer

Equilibrium

Answer

Disequilibrium

Question 3

Elastic demand refers to a situation where the quantity demanded:

Accepted Answer

Responds significantly to changes in price.

Answer

Does not respond to changes in price.

Answer

Increases as price increases.

Answer

Decreases as price decreases.

Question 4

When demand is elastic, what is the relationship between price and total revenue?

Accepted Answer

Total revenue decreases as price increases.

Answer

Total revenue increases as price increases.

Answer

Total revenue is unaffected by changes in price.

Answer

Total revenue fluctuates randomly.

Question 5

When the price of a product rises, what happens to the quantity supplied and the quantity demanded?

Accepted Answer

Quantity supplied increases, quantity demanded decreases

Answer

Quantity supplied decreases, quantity demanded increases

Answer

Quantity supplied and quantity demanded both increase

Answer

Quantity supplied and quantity demanded both decrease

Question 6

Which of the following events would result in a leftward shift of the supply curve?

Accepted Answer

An increase in the cost of production

Answer

An increase in the number of suppliers

Answer

The adoption of new technologies

Answer

An increase in consumer demand

Question 7

When demand increases, what is the likely impact on the equilibrium price?

Accepted Answer

It will increase

Answer

It will decrease

Answer

It will remain the same

Answer

It will fluctuate randomly

Question 8

In a perfectly competitive market, the supply curve is:

Accepted Answer

Horizontal

Answer

Vertical

Answer

Upward sloping

Answer

Downward sloping

Question 9

Market equilibrium occurs when:

Accepted Answer

Quantity supplied equals quantity demanded

Answer

Price is at its highest point

Answer

Consumers are willing to buy more than producers are willing to sell

Answer

Producers are willing to sell more than consumers are willing to buy

Question 10

Which event can shift the supply curve to the right?

Accepted Answer

Technological advancements

Answer

Increase in input costs

Answer

Decrease in the number of producers

Answer

Natural disaster

Question 11

Which government intervention sets a minimum price for a good or service?

Accepted Answer

Price floor

Answer

Price ceiling

Answer

Subsidy

Answer

Tax

Question 12

Which factor can lead to market failure?

Accepted Answer

Externalities

Answer

Perfect competition

Answer

Government intervention

Answer

Technological advancements

Question 13

In which scenario would you expect the law of supply to be invalid?

Accepted Answer

When a natural disaster severely damages a significant portion of the supply.

Answer

When a rise in the price of a product occurs.

Answer

When a technological advancement emerges, lowering production costs.

Question 14

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

Accepted Answer

Price will increase, and quantity will decrease.

Answer

Both price and quantity will increase.

Answer

Price will decrease, and quantity will increase.

Answer

Both price and quantity will decrease.

Question 15

What is the relationship between the law of demand and the law of supply?

Accepted Answer

The law of demand is positive, while the law of supply is negative, meaning that as the price of a good or service increases, the quantity demanded increases, but the quantity supplied decreases.

Answer

They are unrelated concepts.

Answer

They are both positive relationships, meaning that as price increases, quantity also increases.

Answer

They are both negative relationships, meaning that as price increases, quantity decreases.

Question 16

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer tastes and preferences

Answer

Technology

Answer

Government regulations

Answer

Number of suppliers

Question 17

What is the effect of a government subsidy on the market equilibrium for a good?

Accepted Answer

Price will decrease, and quantity will increase.

Answer

Both price and quantity will decrease.

Answer

Price will increase, and quantity will decrease.

Answer

Both price and quantity will increase.

Question 18

What is the concept of elasticity of demand?

Accepted Answer

It measures the responsiveness of quantity demanded to changes in price.

Answer

It measures the responsiveness of price to changes in quantity demanded.

Answer

It measures the responsiveness of quantity supplied to changes in price.

Answer

It measures the responsiveness of price to changes in quantity supplied.

Question 19

When consumer income increases, what typically happens to the demand for a normal good?

Accepted Answer

Increases

Answer

Decreases

Answer

Stays the same

Answer

Varies unpredictably

Question 20

If the supply of a good increases while the demand remains unchanged, what will happen to the equilibrium price?

Accepted Answer

Decrease

Answer

Increase

Answer

Remain the same

Answer

Varies

Question 21

Which of the following is not a determinant of supply?

Accepted Answer

Consumer preferences

Answer

Production costs

Answer

Number of suppliers

Answer

Technology

Question 22

A price ceiling is a government-imposed maximum price on a good or service. What is the probable effect of a price ceiling set below the equilibrium price?

Accepted Answer

Shortage

Answer

Increase in supply

Answer

Decrease in demand

Answer

Surplus

Question 23

Which of the following characteristics describes a perfectly elastic demand curve?

Accepted Answer

Horizontal

Answer

Vertical

Answer

Downward-sloping

Answer

Upward-sloping

Question 24

If demand for a good rises while supply remains constant, what will be the impact on the equilibrium quantity?

Accepted Answer

Expansion

Answer

Contraction

Answer

No change

Answer

Unpredictable

Question 25

Which type of elasticity measures the responsiveness of demand to changes in consumer income?

Accepted Answer

Income elasticity

Answer

Price elasticity

Answer

Cross-price elasticity

Answer

Arc elasticity

Question 26

Which of the following is an exception to the law of demand? Provide a real-world example to illustrate your answer.

Accepted Answer

Giffen Goods

Answer

Luxury Goods

Answer

Substitute Goods

Answer

Complementary Goods

Question 27

If demand becomes more elastic, what happens to consumer surplus?

Accepted Answer

It increases

Answer

It decreases

Answer

It remains the same

Answer

It becomes negative

Question 28

Analyze the effects of a government-set price floor on market equilibrium. Consider its impact on producers, consumers, and market efficiency.

Accepted Answer

Price floors can incentivize increased production, benefiting producers.

Answer

Price floors always lead to higher consumer surplus.

Answer

Price floors have no effect on market efficiency.

Answer

Price floors are always beneficial to both producers and consumers.

Question 29

How does international trade impact the supply and demand of goods and services within a nation?

Accepted Answer

It increases both supply and demand.

Answer

It increases supply and reduces demand.

Answer

It decreases supply and increases demand.

Answer

It has no impact on supply and demand.

Question 30

Which of the following would not lead to an increase in the demand for a product?

Accepted Answer

An increase in the price of a substitute product

Answer

A decrease in the price of the product

Answer

An increase in consumer income

Answer

A positive change in consumer tastes

Question 31

What is the term for the amount of a product that producers are willing and able to supply at a given price?

Accepted Answer

Supply

Answer

Demand

Answer

Equilibrium

Answer

Market value

Question 32

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer preferences

Answer

Cost of production

Answer

Technology

Answer

Government subsidies

Question 33

What happens to market equilibrium when demand increases and supply remains constant?

Accepted Answer

The price increases, and the quantity demanded increases

Answer

The price increases, and the quantity supplied decreases

Answer

The price decreases, and the quantity demanded increases

Answer

The price decreases, and the quantity supplied decreases

Question 34

What is the main consequence of a price ceiling below the equilibrium price?

Accepted Answer

Shortage

Answer

Surplus

Answer

Equilibrium

Answer

Disequilibrium

Question 35

Which of the following would NOT be considered an externality?

Accepted Answer

The benefits of education

Answer

Pollution from a factory

Answer

Traffic congestion

Answer

The costs of crime

Question 36

How does an increase in consumer income typically affect the demand for a normal good?

Accepted Answer

Increases

Answer

Decreases

Answer

Remains unchanged

Answer

May increase or decrease depending on the specific good

Question 37

In a market, what price represents the point where the quantity supplied equals the quantity demanded?

Accepted Answer

Equilibrium price

Answer

Market price

Answer

Ceiling price

Answer

Floor price

Question 38

State the law of diminishing marginal utility.

Accepted Answer

As you consume more of a good, the additional satisfaction gained from each additional unit decreases.

Answer

As you produce more of a good, the additional profit earned from each additional unit increases.

Answer

As you consume more of a good, the price you are willing to pay for each additional unit decreases.

Answer

As you produce more of a good, the cost of producing each additional unit increases.

Question 39

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

Accepted Answer

Rent control

Answer

Minimum wage

Answer

Luxury tax

Answer

Interest rate increase

Question 40

What is the primary purpose of a government-imposed price floor?

Accepted Answer

Protect producers from low prices

Answer

Protect consumers from high prices

Answer

Increase government revenue

Answer

Reduce consumption of certain goods

Question 41

Which of the following is NOT a factor that influences supply?

Accepted Answer

Consumer tastes

Answer

Availability of resources

Answer

Cost of production

Question 42

What is the effect of an increase in consumer income on demand?

Accepted Answer

Increase in demand

Answer

No change in demand

Answer

Decrease in demand

Question 43

Which of the following is a characteristic of a market in equilibrium?

Accepted Answer

Quantity supplied equals quantity demanded

Answer

There is a surplus of goods

Answer

Price is rising

Answer

There is a shortage of goods

Question 44

What is the effect of a technological advancement on supply?

Accepted Answer

Increase in supply

Answer

No change in supply

Answer

Cannot be determined

Answer

Decrease in supply

Question 45

Which of the following is NOT a consequence of a disequilibrium in the market?

Accepted Answer

Stability

Answer

Changes in quantity supplied or demanded

Answer

Price adjustments

Answer

Surplus or shortage

Question 46

What is the role of the equilibrium price in the market?

Accepted Answer

Balances supply and demand

Answer

Guarantees a fair profit

Answer

Minimizes consumer surplus

Answer

Maximizes producer surplus

Question 47

Which of the following is an example of a price ceiling?

Accepted Answer

Rent control

Answer

Subsidy

Answer

Minimum wage

Answer

Tax

Question 48

Which of the following is NOT a factor that directly affects the supply of a good?

Accepted Answer

Consumer preferences

Answer

Government regulations on production

Answer

The number of producers in the market

Answer

Technological advancements in production

Question 49

If demand for a good increases while supply stays the same, what will happen to the equilibrium price?

Accepted Answer

The price will increase.

Answer

The price will decrease.

Answer

The price will remain the same.

Answer

The price will fluctuate unpredictably.

Question 50

A surplus in a market occurs when:

Accepted Answer

The quantity supplied exceeds the quantity demanded.

Answer

The quantity demanded exceeds the quantity supplied.

Answer

The price is above the equilibrium price.

Question 51

Which of these is a defining characteristic of a perfectly competitive market?

Accepted Answer

Many buyers and sellers, each with a small market share.

Answer

Products are differentiated, offering unique features.

Answer

A single producer controls the price of the good.

Answer

Barriers to entry and exit for new firms.

Question 52

What does the law of diminishing marginal utility state?

Accepted Answer

As you consume more of a good, the additional satisfaction you get from each extra unit decreases.

Answer

The satisfaction you get from a good is directly proportional to how much you consume.

Question 53

In a perfectly competitive market, what is the typical profit situation for a firm in the long run?

Accepted Answer

Zero economic profit.

Answer

Positive economic profit in both the short and long run.

Answer

Negative economic profit in both the short and long run.

Answer

Positive economic profit in the short run, but negative in the long run.