Supply and Demand Dynamics

Supply and Demand Dynamics

Test your understanding of fundamental economic principles with this engaging quiz on supply and demand concepts and scenarios.

published on Tuesday
1/15

What happens in a shortage situation?

What happens in a shortage situation?
Government sets price controls.
Quantity supplied exceeds quantity demanded.
Market is at equilibrium.
Quantity demanded exceeds quantity supplied.
2/15

What is an equilibrium price?

What is an equilibrium price?
The price where quantity supplied equals quantity demanded.
The average price over a year.
The price set by the government.
The highest price a product can reach.
3/15

What effect might a subsidy have on supply?

What effect might a subsidy have on supply?
Decrease in supply.
Increase in supply.
Supply becomes unpredictable.
Supply stays the same.
4/15

What might cause a leftward shift in the demand curve?

What might cause a leftward shift in the demand curve?
Decrease in the price of substitutes.
Increase in the price of complements.
Increase in consumer preferences.
Decrease in consumer income.
5/15

What typically happens to supply when prices increase?

What typically happens to supply when prices increase?
Supply decreases.
Supply remains constant.
Supply vanishes.
Supply increases.
6/15

When a product is inelastic, a price increase will...

When a product is inelastic, a price increase will...
Cause no change in quantity demanded.
Cause a small decrease in quantity demanded.
Cause demand to vanish.
Cause a large decrease in quantity demanded.
7/15

What describes a surplus in a market?

What describes a surplus in a market?
Quantity supplied exceeds quantity demanded.
Supply and demand are equal.
No transactions occur.
Quantity demanded exceeds quantity supplied.
8/15

If demand decreases and supply remains unchanged, what is likely to happen to the price?

If demand decreases and supply remains unchanged, what is likely to happen to the price?
Price remains unchanged.
Price decreases.
Price fluctuates irregularly.
Price increases.
9/15

What is the Law of Demand?

What is the Law of Demand?
As prices decrease, demand increases.
As prices increase, demand increases.
As income decreases, demand increases.
As production costs decrease, demand decreases.
10/15

What is the market clearing price?

What is the market clearing price?
The highest price sustainable by demand.
The lowest price sustainable by costs.
The price at which the amount supplied equals the amount demanded.
The government-enforced price.
11/15

What economic concept is illustrated by a supply curve?

What economic concept is illustrated by a supply curve?
Relationship between price and quantity supplied.
Consumer preference at various prices.
Relationship between price and quantity demanded.
Market saturation levels.
12/15

What is a substitute good?

What is a substitute good?
A complementary good.
A good that can replace another.
A luxury item.
A necessary good.
13/15

What factor is most likely to cause a shift in the supply curve?

What factor is most likely to cause a shift in the supply curve?
Change in taste and preferences.
Change in consumer income.
Change in the number of buyers.
Change in production technology.
14/15

In a competitive market, what usually determines the price of goods?

In a competitive market, what usually determines the price of goods?
Manufacturer's cost of production.
Consumer preferences.
Interactions between supply and demand.
Government regulations.
15/15

What is price elasticity of demand?

What is price elasticity of demand?
A measure of how much the quantity demanded responds to a change in price.
A method to calculate equilibrium price.
A measure of consumer satisfaction with current prices.
A measure of the responsiveness of production to market prices.