Supply and Demand Quiz

What is the Law of Demand?

• The Law of Demand is the direct relationship between price and quantity demanded.

• The Law of Demand is the relationship between supply and demand.

• The Law of Demand is the inverse relationship between price and quantity demanded.

• The Law of Demand is the same as the Law of Supply.

What factors can cause a shift in the demand curve?

• Changes in consumer income, prices of related goods, consumer preferences, population demographics, and advertising and marketing efforts.

• Changes in government policies

• Technological advancements

• Natural disasters

Define price elasticity of demand.

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its quality.

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its price.

• Price elasticity of demand is a measure of the responsiveness of the quantity supplied of a good or service to a change in its price.

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its income.

What is the Law of Supply?

• The Law of Supply states that the quantity supplied by producers remains constant regardless of changes in price.

• The Law of Supply states that as the price of a good or service decreases, the quantity supplied by producers also decreases.

• The Law of Supply states that as the price of a good or service increases, the quantity supplied by producers decreases.

• As the price of a good or service increases, the quantity supplied by producers also increases, and vice versa.

What factors can cause a shift in the supply curve?

Define price elasticity of supply.

• Price elasticity of supply is a measure of the responsiveness of the quantity demanded of a good or service to a change in its price.

• Price elasticity of supply is a measure of the responsiveness of the quantity supplied of a good or service to a change in demand.

• Price elasticity of supply is a measure of the responsiveness of the price of a good or service to a change in its quantity supplied.

• Price elasticity of supply is a measure of the responsiveness of the quantity supplied of a good or service to a change in its price.

What is the relationship between price and quantity demanded according to the Law of Demand?

• Proportional

• Unrelated

• Inverse

• Direct

What is the relationship between price and quantity supplied according to the Law of Supply?

• There is a positive relationship between price and quantity supplied.

• The relationship between price and quantity supplied is random.

• There is no relationship between price and quantity supplied.

• There is a negative relationship between price and quantity supplied.

What does it mean if the price elasticity of demand is greater than 1?

• The demand for the product is inelastic.

• The price of the product is too high.

• The price of the product is too low.

• The demand for the product is elastic.

What does it mean if the price elasticity of supply is less than 1?

• The quantity supplied is perfectly elastic.

• The quantity supplied is elastic.

• The quantity supplied is unitary elastic.

• The quantity supplied is inelastic.