Create better lessons quicker
English
Home Features Price Plans
1) What is the law of Demand? a) As price decreases quantity demanded increases b) As price increases quantity demanded increases c) As income increases quantity demanded decreases d) As price decreases quantity supplied increases 2) Which of the following represents price elasticity of demand (PED)? a) The responsiveness of quantity demanded to a change in price b) The responsiveness of quantity supplied to a change in price c) The responsiveness of demand to a change in income d) The responsiveness of demand to a change in the price of another good 3) If a product has a price elasticity of demand greater than 1 , it is considered: a) Inelastic b) Unit elasticity c) Elastic d) Perfectly inelastic 4) What does income elasticity of demand measure? a) The change in demand when the price of the product changes b) The change in demand when consumer income changes? c) The change in demand when the price of related goods changes d) The change in supply when the price of the product changes 5) What is cross elasticity of demand? a) The responsiveness of quantity demanded of one good to a change in the price of another good b) The responsiveness of demand to changes in consumer preferences c) The responsiveness of supply to changes in production costs d) The responsiveness of demand to changes in advertising 6) Which of the following goods is most likely to have a positive cross elasticity of demand? a) Complementary goods b) Substitute goods c) Inferior goods d) Necessities 7) What is the law of supply? a) As price decreases quantity supplied decreases b) As price decreases quantity supplied increases c) As income increases quantity supplied decreases d) As price increases quantity demanded increases 8) Price elasticity of supply measures: a) The responsiveness of quantity supplied to a change in price b) The responsiveness of quantity demanded to a change in price c) The responsiveness of supply to a change in consumer incomee d) The responsiveness of supply to a change in the price of another good 9) Which factor is likely to make supply more elastic? a) Long production time b) High Fixed Costs c) Availability of spare production capacity d) High specialisation of labour 10) Market equilibrium occurs when: a) Quantity demanded exceeds quantity supplied b) Quantity supplied exceeds quantity demanded c) Quantity demanded equals quantity supplied d) The government intervenes in a market 11) What is the effect of a price ceiling set below the market equilibrium price? a) Surplus b) Shortage c) Market clearing d) Price stabalisation 12) How do prices allocate resources in a market economy a) By central planning b) Through government intervention c) By signaling where resources are most valued d) By random distribution 13) Consumer surplus is defined as: a) The total amount consumers are willing to pay for a good b) The difference between what consumers are willing to pay and what they actually pay c) The total revenue received by producers d) The amount by which production costs exceed sales revenue 14) Producer surplus is: a) The total revenue producers receive from selling a good b) The difference between what producers are willing to accept and what they actually receive c) The cost of production d) The total market value of goods sold 15) What does the Price Elasticity of Supply (PES) depend on? a) The avaialbility of close substitutes for the good b) The degree of necessity of the good c) The time period considered d) The proportion of income spent on the good 16) If the supply of a good is perfectly inelastic, the supply curve is : a) Upward sloping b) Downward sloping c) Horizontal d) Vertical 17) What happens to the equilibrium price and quantity if there is an increase in demand, assuming supply remains constant? a) Price decreases, quantity decreases b) Price increases, quantity increases c) Price decreases, quantity increases d) Price increases, quantity decreases 18) Which of the following best describes a good with inelastic demand? a) Demand is highly responsive to price changes b) Demand changes little with price changes c) Demand changes only with changes in consumer income d) Demand changes only with changes in the price of other goods 19) What is the likley impact on Total revenue if the price of a good with elastic demand is increased? a) Total revenue increases b) Total revenue decreases c) Total revenue remains unchanged d) Total revenue fluctuates randomly 20) What does unitary elastic mean? a) A percentage change in price leads to a larger percentage change in quantity demanded b) A percentage change in price leads to a smaller percentage change in quantity demanded c) A percentage change in price leads to an equal percentage change in quantity demanded d) Demand is completely unresponsive to price changes 21) If two goods are complements, what is their cross elasticity of demand likely to be? a) Positive b) Negative c) Zero d) Infinite 22) Which factor is most likely to make the demand for a good more elastic? a) Fewer available substitutes b) The good being a necessity c) The good being a luxury d) A shorter period of time for consumer adjustment 23) What does the term 'price mechanism' refer to? a) The process by which price rise b) The way in which price allocate resources in a market economy c) Government intervention in pricing d) The setting of prices by monoplolies 24) What happens to the supply curve if a subsidy is provided to producers? a) It shifts to the left b) It shift to the right c) It remains unchanged d) It becomes vertical 25) Which of the following best describes an equilibrium price? a) The price at which quantity demanded exceeds quantity supplied b) The price at which quantity supplied exceeds quantity demanded c) The price at which quantity demanded equals quantity supplied d) The price set by the government

Quiz 3 - Demand, Price Income and Cross Elasticities of Demand, Supply, Price Elasticity of Supply, Market Equilibrium,

by
More

Leaderboard

Visual style

Options

Switch template

Continue editing: ?