Economics Quiz

What happens when the price of a product is set above the equilibrium price?

• Shortage occurs

• Surplus occurs

• Demand increases

• Supply decreases

The law of demand states that as the price of a good increases,

• Quantity demanded increases

• Quantity demanded decreases

• Quantity supplied decreases

• Demand remains constant

When demand increases and supply remains constant, the equilibrium price will:

• Decrease

• Stay the same

• Increase

• Drop to zero

A shift to the right in the demand curve indicates:

• A decrease in demand

• An increase in demand

• A decrease in supply

• No change in demand

What causes a movement along the supply curve?

• A change in the price of the good itself

• A change in the number of suppliers

• A change in consumer preferences

• A change in production technology

If the price of a substitute good rises, what happens to the demand for the original good?

• Increases

• Decreases

• Stays the same

• Drops to zero

A price ceiling set below the equilibrium price results in:

• A surplus

• A shortage

• No effect

• A decrease in demand

Which of the following would cause a leftward shift in the supply curve?

• A technological advancement

• A decrease in production costs

• An increase in input costs

• An increase in the number of suppliers

What is the effect of a price floor set above the equilibrium price?

• Shortage

• Surplus

• Equilibrium is reached

• Price falls

If both demand and supply increase simultaneously, what happens to equilibrium quantity?

• It increases

• It decreases

• It stays the same

• It becomes undefined