Test Your Knowledge: Supply and Demand (1) Find out how well you understand the concepts of supply and demand in economics with this 10-question quiz. michelle published 19 days ago0 responses 0 « Previous Next » Questions in vertical order 1/10 What happens to price when demand increases and supply remains constant? Price decreases Price remains the same Price increases Price fluctuates 2/10 Which curve represents the relationship between price and quantity supplied? Demand curve Supply curve Equilibrium curve None of the above 3/10 What does a surplus indicate in the market? Supply exceeds demand Demand exceeds supply Price is too low Perfect competition 4/10 If the government imposes a price ceiling below the equilibrium price, what is likely to happen? Shortage Surplus Equilibrium price Increase in quantity supplied 5/10 What happens to equilibrium price and quantity when demand and supply both increase? Price increases, quantity increases Price decreases, quantity decreases Price may increase or decrease, quantity increases Price increases, quantity decreases 6/10 In a perfectly competitive market, what drives prices to equilibrium? Interplay of supply and demand Government regulations Monopoly power Price fixing agreements 7/10 What effect will a decrease in production costs have on the supply curve? Shift to the right Shift to the left No impact on the curve Causes a shortage 8/10 What is the term for the point where supply and demand intersect? Equilibrium price Market equilibrium Price control Elasticity point 9/10 What is the law of demand? As price goes up, quantity demanded goes down As price goes down, quantity demanded goes down As price goes down, quantity demanded goes up Price and quantity are not related 10/10 If consumer income increases for a normal good, what is likely to happen to the demand? Increase Decrease Remain constant No impact on the demand curve
