Quiz on Demand and Supply

What is the primary function of a market?

• To bring buyers and sellers together

• To provide goods and services

• To set prices for goods

• To regulate the economy

What is the law of demand?

• Demand increases with an increase in price

• Quantity demanded remains constant regardless of price

• Price and quantity demanded are inversely related

• Price and quantity demanded are directly related

What causes a shift in the demand curve?

• Change in the quantity supplied

• Change in production costs

• Change in consumer preferences

• Change in the price of the good

What are complementary goods?

• Goods that can replace each other

• Goods consumed together

• Goods that are unrelated

• Goods that are always in demand

What does an increase in supply typically lead to?

• Lower prices and higher quantity

• Higher prices and lower quantity

• Higher prices and no change in quantity

• No change in price

What is market equilibrium?

• When prices are fixed

• When demand exceeds supply

• When supply exceeds demand

• When demand equals supply

What happens when a price ceiling is set below the equilibrium price?

• Surplus occurs

• Shortage occurs

• Equilibrium is maintained

• Demand decreases

What is a price floor?

• A minimum price set by the government

• A price that fluctuates with demand

• A maximum price set by the government

• A price determined by market forces

Which of the following is a determinant of demand?

• Number of producers

• Tastes and preferences

• Technology

• Prices of resources

What is the relationship between price and quantity supplied according to the law of supply?

• Inverse relationship

• Variable relationship

• No relationship

• Direct relationship