Quiz on Market Forces of Supply and Demand

What are the two main forces that make market economies work?

• Competition and Monopoly

• Buyers and Sellers

• Price and Quantity

• Supply and Demand

In a competitive market, who determines demand?

• Sellers

• Buyers

• Producers

• Government

What does the law of demand state?

• There is an inverse relationship between price and quantity demanded.

• Demand increases as supply decreases.

• There is a direct relationship between price and quantity demanded.

• Price has no effect on quantity demanded.

What is a demand schedule?

• A table showing the relationship between price and quantity demanded.

• A record of sales transactions.

• A list of all buyers in the market.

• A graph of supply and demand curves.

What happens to the demand curve when consumer income increases for a normal good?

• It remains unchanged.

• It shifts to the right.

• It becomes vertical.

• It shifts to the left.

What is the law of supply?

• Supply is always constant regardless of price.

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

• There is an inverse relationship between price and quantity supplied.

• Supply decreases as demand increases.

What is market equilibrium?

• The highest price consumers are willing to pay.

• The point where supply and demand curves intersect.

• The total quantity supplied in the market.

• The lowest price suppliers are willing to accept.

What occurs when there is excess supply in the market?

• Prices will rise.

• Prices will fall.

• Demand will increase.

• Supply will decrease.

What is a shift in the demand curve called?

• Change in supply

• Change in demand

• Change in equilibrium

• Change in quantity demanded

What effect does a decrease in supply have on equilibrium price?

• It decreases the equilibrium price.

• It has no effect on the equilibrium price.

• It increases the equilibrium price.

• It makes the equilibrium price unpredictable.