Supply and Market Equilibrium Quiz

What does the law of supply state?

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

• The quantity supplied is constant regardless of price.

• Price and quantity supplied have no relationship.

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

What is individual supply?

• The total quantity supplied by all firms in the market.

• The quantity a firm is willing to produce at a specific price.

• The quantity of goods available in a monopoly.

• The amount of goods demanded by consumers.

What happens to the supply curve when supply decreases?

• It shifts to the right.

• It shifts to the left.

• It remains unchanged.

• It becomes vertical.

Which of the following is a determinant of supply?

• Government regulations.

• Price of the commodity.

• Consumer preferences.

• Market demand.

What is the definition of market equilibrium?

• When quantity demanded equals quantity supplied.

• When demand exceeds supply.

• When supply exceeds demand.

• When prices are fixed by the government.

What is the effect of an increase in demand on market equilibrium?

• It has no effect.

• It causes a shortage.

• It causes a surplus.

• It decreases the equilibrium price.

What are private costs?

• Costs that are not measurable.

• Costs borne by individuals or companies directly involved in a transaction.

• Costs that only affect consumers.

• Costs incurred by society as a whole.

What is the primary focus of accounting costs?

• Implicit costs.

• Explicit costs.

• Opportunity costs.

• Social costs.

What is the relationship between short-run and long-run costs?

• Short-run costs are always lower than long-run costs.

• Long-run costs include fixed costs.

• Long-run costs are fixed.

• Short-run costs include both fixed and variable costs.

What is elasticity of supply?

• The responsiveness of quantity supplied to a change in price.

• The total quantity supplied at a fixed price.

• The relationship between supply and demand.

• The fixed costs of production.