Test Your Knowledge: Supply and Demand (1)

Test Your Knowledge: Supply and Demand (1)

Find out how well you understand the concepts of supply and demand in economics with this 10-question quiz.

published on April 10
1/10

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

What happens to price when demand increases and supply remains constant?
Price decreases
Price remains the same
Price increases
Price fluctuates
2/10

Which curve represents the relationship between price and quantity supplied?

Demand curve
Supply curve
Equilibrium curve
None of the above
3/10

What does a surplus indicate in the market?

What does a surplus indicate in the market?
Supply exceeds demand
Demand exceeds supply
Price is too low
Perfect competition
4/10

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

Shortage
Surplus
Equilibrium price
Increase in quantity supplied
5/10

What happens to equilibrium price and quantity when demand and supply both increase?

What happens to equilibrium price and quantity when demand and supply both increase?
Price increases, quantity increases
Price decreases, quantity decreases
Price may increase or decrease, quantity increases
Price increases, quantity decreases
6/10

In a perfectly competitive market, what drives prices to equilibrium?

In a perfectly competitive market, what drives prices to equilibrium?
Interplay of supply and demand
Government regulations
Monopoly power
Price fixing agreements
7/10

What effect will a decrease in production costs have on the supply curve?

What effect will a decrease in production costs have on the supply curve?
Shift to the right
Shift to the left
No impact on the curve
Causes a shortage
8/10

What is the term for the point where supply and demand intersect?

What is the term for the point where supply and demand intersect?
Equilibrium price
Market equilibrium
Price control
Elasticity point
9/10

What is the law of demand?

What is the law of demand?
As price goes up, quantity demanded goes down
As price goes down, quantity demanded goes down
As price goes down, quantity demanded goes up
Price and quantity are not related
10/10

If consumer income increases for a normal good, what is likely to happen to the demand?

If consumer income increases for a normal good, what is likely to happen to the demand?
Increase
Decrease
Remain constant
No impact on the demand curve