Demand and Supply: Interactive Quizzes for Economics Sixth Form

Question 1

What factor would cause a reduction in the quantity of a product supplied?

Accepted Answer

Higher input costs

Answer

Lower consumer demand

Answer

Government subsidies

Question 2

Which of the following is a necessary condition for a market to achieve equilibrium?

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Price is above the equilibrium price

Answer

Demand exceeds supply

Question 3

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

Accepted Answer

Number of sellers in the market

Answer

Personal preferences and tastes

Answer

Price of related goods

Answer

Consumer income

Question 4

A decrease in the price of a good generally results in:

Accepted Answer

An increase in quantity demanded

Answer

An increase in quantity supplied

Answer

A decrease in quantity demanded

Answer

No change in quantity demanded or supplied

Question 5

When the government sets a maximum price for a good, it is known as:

Accepted Answer

Price ceiling

Answer

Price floor

Answer

Price band

Answer

Price cap

Question 6

A subsidy provided on a product typically leads to:

Accepted Answer

An increase in quantity supplied

Answer

An increase in quantity demanded

Answer

A decrease in quantity demanded

Answer

No change in quantity demanded or supplied

Question 7

The elasticity of supply measures the:

Accepted Answer

Responsiveness of quantity supplied to a change in price

Answer

Responsiveness of quantity demanded to a change in price

Answer

Change in price relative to the change in quantity supplied

Answer

Change in quantity demanded relative to the change in price

Question 8

Which of the following is NOT a determinant of supply?

Accepted Answer

Number of buyers in the market

Answer

Cost of production

Answer

Technological advancements

Answer

Availability of resources

Question 9

At the equilibrium price in a market, what is the relationship between the quantity demanded and the quantity supplied?

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Quantity demanded is less than quantity supplied

Answer

Quantity demanded is greater than quantity supplied

Answer

Quantity supplied is greater than quantity demanded

Question 10

Calculate the elasticity of demand for a product that sees a 10% decrease in quantity demanded in response to a 5% increase in price.

Accepted Answer

0.5

Answer

1.0

Answer

2.0

Answer

5.0

Question 11

Which option is NOT a potential cause of market failure?

Accepted Answer

Perfect competition

Answer

Externalities

Answer

Public goods

Answer

Asymmetric information

Question 12

What is the intended purpose of a quota system?

Accepted Answer

To limit the production or sale of a good or service

Answer

To ensure producers receive a minimum price

Answer

To subsidize consumers

Answer

To foster greater competition in the market

Question 13

Identify the characteristic of a perfectly elastic demand curve.

Accepted Answer

It is horizontal

Answer

It is vertical

Answer

It is upward sloping

Answer

It is downward sloping

Question 14

Explain the difference between a positive externality and a negative externality.

Accepted Answer

A positive externality benefits others, while a negative externality harms others.

Answer

A positive externality harms others, while a negative externality benefits others.

Answer

A positive externality occurs when producing a good or service, while a negative externality occurs when consuming a good or service.

Answer

A positive externality occurs when consuming a good or service, while a negative externality occurs when producing a good or service.

Question 15

What is the typical relationship between the supply of a product and its price?

Accepted Answer

Supply is directly proportional to price.

Answer

Supply is inversely proportional to price.

Answer

There is no consistent relationship between supply and price.

Answer

The relationship depends on the specific product market.

Question 16

The elasticity of demand for a product measures the:

Accepted Answer

Responsiveness of quantity demanded to price changes.

Answer

Responsiveness of supply to price changes.

Answer

Responsiveness of equilibrium price to changes in supply and demand.

Answer

Responsiveness of consumer spending to income changes.

Question 17

The purpose of a price ceiling is to:

Accepted Answer

Set a maximum legal price that can be charged for a product or service.

Answer

Set a minimum legal price that can be charged for a product or service.

Answer

Eliminate shortages in a product market.

Answer

Increase consumer spending.

Question 18

Which of the following is NOT a potential advantage of a free market economic system?

Accepted Answer

Absolute fairness in outcomes

Answer

Efficiency

Answer

Consumer choice

Answer

Innovation and economic growth

Question 19

The primary goal of antitrust laws is to:

Accepted Answer

Prevent the formation of monopolies and promote competition.

Answer

Protect consumers from unfair business practices.

Answer

Regulate the prices of goods and services.

Answer

Provide financial assistance to businesses.

Question 20

According to the law of supply, which assumption is NOT necessary to hold constant?

Accepted Answer

There are no externalities

Answer

All other factors remain constant

Answer

Producers aim to maximize profits

Answer

Technology is constant

Question 21

How does market equilibrium differ from market disequilibrium?

Accepted Answer

At equilibrium, there is neither shortage nor surplus, while in disequilibrium, either a shortage or surplus exists

Answer

At equilibrium, there is excess demand, while in disequilibrium, there is excess supply

Answer

At equilibrium, there is excess supply, while in disequilibrium, there is excess demand

Answer

There is no difference between equilibrium and disequilibrium

Question 22

How does a decrease in income typically affect the demand for inferior goods?

Accepted Answer

Decrease

Answer

Increase

Answer

Remain unchanged

Answer

Cannot be determined

Question 23

What factors can cause a shift in the demand curve for a product?

Accepted Answer

Changes in consumer preferences

Accepted Answer

Changes in the price of substitute goods

Accepted Answer

Changes in consumer income

Answer

Changes in the number of suppliers

Question 24

Which government intervention would lead to an increase in both consumer surplus and producer surplus?

Accepted Answer

Production subsidy

Answer

Price ceiling below equilibrium price

Answer

Price floor above equilibrium price

Answer

Consumption tax

Question 25

When demand for a product is elastic, what is the typical effect of a price increase on the firm's total revenue?

Accepted Answer

Decrease

Answer

Increase

Answer

No change

Question 26

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

Accepted Answer

Quantity supplied

Answer

Price of the good

Answer

Marginal utility of the good

Answer

Total revenue for the seller

Question 27

A price ceiling is likely to cause:

Accepted Answer

A shortage in the market

Answer

A surplus in the market

Answer

An increase in consumer surplus

Answer

An increase in producer surplus

Question 28

The consumer surplus is the:

Accepted Answer

Area below the demand curve and above the equilibrium price

Answer

Area above the demand curve and below the equilibrium price

Answer

Area below the supply curve and above the equilibrium price

Answer

Area above the supply curve and below the equilibrium price

Question 29

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

Accepted Answer

It is horizontal

Answer

It is vertical

Answer

It has a positive slope

Answer

It has a negative slope

Question 30

The equilibrium price is the price at which:

Accepted Answer

Quantity demanded equals quantity supplied

Answer

Consumer surplus equals producer surplus

Answer

The elasticity of demand equals the elasticity of supply

Answer

The marginal cost of production equals the marginal utility of consumption

Question 31

The producer surplus is the:

Accepted Answer

Area below the supply curve and above the equilibrium price

Answer

Area above the supply curve and below the equilibrium price

Answer

Area below the demand curve and above the equilibrium price

Answer

Area above the demand curve and below the equilibrium price

Question 32

How does a technological advancement that reduces production costs affect the equilibrium price and quantity of a good?

Accepted Answer

Lower equilibrium price, higher equilibrium quantity

Answer

Higher equilibrium price, higher equilibrium quantity

Answer

Lower equilibrium price, lower equilibrium quantity

Answer

Higher equilibrium price, unchanged equilibrium quantity

Question 33

In a typical supply curve, how does quantity supplied respond to changes in price?

Accepted Answer

It increases as price increases

Answer

It decreases as price increases

Answer

It remains constant regardless of price

Answer

It follows a U-shaped pattern

Question 34

At market equilibrium, what is the relationship between supply and demand?

Accepted Answer

Supply equals demand

Answer

Supply exceeds demand

Answer

Demand exceeds supply

Answer

Supply and demand are both increasing

Question 35

If a good has an elastic demand curve, what is the likely effect of a price increase on total revenue?

Accepted Answer

Total revenue will decrease

Answer

Total revenue will increase

Answer

Total revenue will remain unchanged

Answer

The impact on total revenue is uncertain

Question 36

What is the primary goal of a price floor?

Accepted Answer

To protect producers by setting a minimum price for their goods

Answer

To protect consumers by ensuring goods are sold at a fair price

Answer

To increase competition in the market

Answer

To reduce government spending on welfare programs

Question 37

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

Accepted Answer

Shortage in the market

Answer

Surplus in the market

Answer

Increased consumer spending

Answer

Reduced producer profits

Question 38

How do subsidies and taxes differ?

Accepted Answer

Subsidies increase supply, while taxes decrease supply

Answer

Subsidies are paid to consumers, while taxes are paid to producers

Answer

Subsidies are paid to producers, while taxes are paid to consumers

Answer

Subsidies decrease supply, while taxes increase supply

Question 39

Which of the following factors would NOT lead to a shift in the demand curve for a normal good?

Accepted Answer

Change in the price of the normal good itself

Answer

Change in consumer income

Answer

Change in consumer tastes and preferences

Answer

Change in the price of a substitute good

Question 40

An increase in the price of coffee is likely to lead to:

Accepted Answer

A decrease in the quantity of coffee demanded.

Answer

No change in the quantity of coffee demanded or supplied.

Answer

A decrease in the quantity of coffee supplied.

Answer

An increase in the quantity of coffee demanded.

Question 41

Which of the following factors is most likely to cause a shift in the demand curve for electric cars?

Accepted Answer

A change in consumer preferences towards environmentally friendly vehicles.

Answer

An increase in the price of petrol.

Answer

A decrease in the price of electric cars.

Question 42

A technological advancement in the production of smartphones is likely to lead to:

Accepted Answer

An increase in the supply of smartphones.

Answer

A decrease in the demand for smartphones.

Answer

An increase in the demand for smartphones.

Answer

A decrease in the supply of smartphones.

Question 43

The price elasticity of demand for a product is likely to be higher if:

Accepted Answer

The product has many close substitutes.

Answer

The product represents a small proportion of a consumer's budget.

Answer

Consumers have a short time period to adjust to price changes.

Answer

The product is a necessity.

Question 44

If the demand for a good is price inelastic, then an increase in its price will lead to:

Accepted Answer

An increase in total revenue for sellers.

Answer

An increase in consumer surplus.

Answer

No change in total revenue for sellers.

Answer

A decrease in total revenue for sellers.

Question 45

A binding price ceiling set below the equilibrium price will likely result in:

Accepted Answer

A shortage of the good.

Answer

Market equilibrium.

Answer

A surplus of the good.

Answer

An increase in producer surplus.

Question 46

A minimum wage law is an example of:

Accepted Answer

A price floor.

Answer

A price ceiling.

Answer

A tax on labor.

Answer

A subsidy for employers.

Question 47

An increase in the price of a substitute good will likely lead to:

Accepted Answer

An increase in demand for the original good.

Answer

An increase in supply of the original good.

Answer

A decrease in supply of the original good.

Answer

A decrease in demand for the original good.

Question 48

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer income.

Answer

The price of inputs.

Answer

Technological advancements.

Answer

The number of sellers in the market.