Test Your Knowledge on Supply and Demand

Test Your Knowledge on Supply and Demand

Take this quiz to see how well you understand the fundamental principles of supply and demand in economics.

published on August 14
1/12

What happens to price when demand increases and supply remains constant?

What happens to price when demand increases and supply remains constant?
Price goes down
Price goes up
Price stays the same
2/12

When does a shortage occur in the market?

When does a shortage occur in the market?
When demand is low
When supply exceeds demand
When quantity demanded exceeds quantity supplied
3/12

What impact do high prices have on consumer demand?

What impact do high prices have on consumer demand?
Increases demand
Decreases demand
4/12

How do changes in consumer income affect demand for normal goods?

How do changes in consumer income affect demand for normal goods?
Increase demand
No effect on demand
5/12

What happens to price when both demand and supply decrease?

What happens to price when both demand and supply decrease?
Price goes up
Price goes down
Price may stay the same or go up, depending on the degree of change
6/12

What is the relationship between price and quantity supplied?

Inverse relationship
Direct relationship
No relationship
7/12

What is likely to happen to demand for umbrellas during rainy seasons?

Increase
Decrease
Remain constant
8/12

What is the law of demand?

What is the law of demand?
Higher prices lead to lower demand
Lower prices lead to lower demand
9/12

What does an increase in supply usually lead to?

What does an increase in supply usually lead to?
Lower prices
Higher prices
Price remains the same
10/12

What is equilibrium price?

What is equilibrium price?
The highest price in the market
The lowest price in the market
The price at which quantity supplied equals quantity demanded
11/12

What could cause a shift in the supply curve?

Change in consumer preferences
Change in input prices
Change in population size
12/12

What is a substitute good?

A good that is always cheaper
A good that can be used in place of another good
A type of luxury item