Supply and Demand Quiz

What is the law of supply?

• As the price of a good decreases, the quantity supplied increases

• As the price of a good increases, the quantity supplied decreases

• As the price of a good increases, the quantity supplied increases

• As the price of a good decreases, the quantity supplied decreases

What does the law of demand state?

• As the price of a good decreases, the quantity demanded decreases

• As the price of a good increases, the quantity demanded increases

• As the price of a good decreases, the quantity demanded increases

• As the price of a good increases, the quantity demanded decreases

What is the key characteristic of a free market?

• Limited competition

• Public property

• Profit motive

• Government intervention

What does the law of supply and demand determine?

• Equilibrium price

• Excess supply

• Excess demand

• Market intervention

What causes a shift in the supply curve?

• Change in taste and preference

• Change in the number of producers

• Change in the price of other goods

• Change in income levels

What causes a shift in the demand curve with a constant price?

• Change in technology

• Change in the price of other goods

• Change in income levels

• Change in taste and preference

What is elasticity in terms of supply and demand?

• Degree to which a demand or supply curve reacts to a change in price

• Degree to which a demand or supply curve reacts to a change in income

• Degree to which a demand or supply curve reacts to a change in technology

• Degree to which a demand or supply curve reacts to a change in quantity

How does opportunity cost relate to elasticity?

• Goods or services may not be purchased because of a high necessity which then makes the opportunity costs too low

• Goods or services may not be purchased because of a high necessity which then makes the opportunity costs too high

• Goods or services may not be purchased because of a less of a necessity which then makes the opportunity costs too low

• Goods or services may not be purchased because of a less of a necessity which then makes the opportunity costs too high

What is the relationship between excess supply and excess demand?

• Excess supply leads to a surplus

• Excess demand leads to a surplus

• Excess supply leads to a shortage

• Excess demand leads to a shortage

What is the main factor that determines supply?

• Change in expectations

• Change in taste and preference

• Change in the number of potential customers

• Change in technology