IBM_tutorial_5

What is demand?

• The total supply of a product.

• The willingness and ability of consumers to purchase a product.

• The amount of a product offered for sale.

• The minimum price allowed by the government.

What is supply?

• The price consumers are willing to pay.

• The willingness and ability of producers to offer a product.

• The total amount demanded by consumers.

• The equilibrium price of a product.

When the price of a product increases, what generally happens to the quantity demanded?

• It increases.

• It decreases.

• It stays the same.

• It doubles.

What does a surplus indicate in a market?

• Demand is greater than supply.

• Supply is greater than demand.

• Demand and supply are equal.

• Price is at equilibrium.

If the price of milk decreases, what happens to the quantity demanded, according to the law of demand?

• It decreases.

• It increases.

• It stays the same.

• It becomes zero.

What term describes the responsiveness of quantity demanded to a change in price?

• Supply elasticity

• Demand elasticity

• Surplus

• Shortage

What happens when the price of a substitute product rises?

• Demand for the original product decreases.

• Demand for the original product increases.

• Supply of the original product decreases.

• Supply of the original product increases.

Which of the following is NOT a factor affecting demand?

• Consumer income

• Price of substitutes

• Production technology

• Consumer preferences

What is equilibrium in a market?

• When quantity demanded equals quantity supplied.

• When there is a surplus of products.

• When the price is above market value.

• When demand exceeds supply.

A price ceiling set below equilibrium price creates a:

• Surplus

• Shortage

• New equilibrium

• Decrease in demand