Supply And Demand Quiz
Questions and Answers
- 1.
A group of people buying and selling goods or services. This is the definition for:
- A.
Demand
- B.
Equilibrium
- C.
Market
- D.
Supply
Correct Answer
C. MarketExplanation
The correct answer is "Market" because a market refers to a group of people who engage in buying and selling goods or services. It is a place or a system where buyers and sellers interact to exchange goods or services based on demand and supply. In a market, prices are determined by the forces of supply and demand, and it serves as a platform for economic transactions to take place.Rate this question:
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- 2.
The desire to own a product and the ability/ willingness to pay for it. This is the definition for:
- A.
Supply
- B.
Elasticity
- C.
Demand
- D.
Market
Correct Answer
C. DemandExplanation
Demand refers to the desire or need for a product or service, coupled with the ability and willingness to pay for it. In other words, it represents the consumer's willingness to purchase a particular product at a given price. The concept of demand is crucial in economics as it helps determine the quantity of goods or services that consumers are willing to buy at various price levels.Rate this question:
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- 3.
With regard to demand, a change in price of a product/service results in movement along the curve.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A change in price of a product/service affects the demand for that product/service, resulting in movement along the demand curve. When the price of a product/service decreases, the quantity demanded increases, and when the price increases, the quantity demanded decreases. This movement along the curve is known as a change in quantity demanded, which is caused by a change in price. Therefore, the statement is true.Rate this question:
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- 4.
In the Law Of Supply an increase in price results in:
- A.
Decrease of quantity supplied
- B.
Increase of quantity supplied
Correct Answer
B. Increase of quantity suppliedExplanation
According to the Law of Supply, an increase in price results in an increase in quantity supplied. This means that as the price of a good or service increases, producers are willing and able to supply more of it to the market. Higher prices incentivize producers to allocate more resources and invest in the production of the good or service, leading to an increase in the quantity supplied.Rate this question:
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- 5.
The Law Of Demand helps to explain social behaviour.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The Law Of Demand actually helps to explain economic behaviour.Rate this question:
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- 6.
The _________ is the price where supply of quantity equals quantity demanded
Correct Answer
EquilibriumExplanation
The term "equilibrium" refers to the point at which the supply of a product or service matches the demand for it. It is the price at which the quantity supplied by producers is equal to the quantity demanded by consumers. This balance ensures that there is neither excess supply nor excess demand in the market, resulting in a stable and efficient allocation of resources.Rate this question:
- 7.
The supply curve shows the relationship of quantity and price demanded.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The demand curve actually shows the relationship of quantity and price demanded.Rate this question:
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- 8.
What occurs when quantity supplied is greater than quantity demanded at ruling price?
- A.
Excess Demand
- B.
Equilibrium Price
- C.
Comparative Static Analysis
- D.
Excess Supply
Correct Answer
D. Excess SupplyExplanation
When quantity supplied is greater than quantity demanded at the ruling price, it creates a situation known as excess supply. This means that there is an oversupply of the product in the market, and sellers are unable to sell all of their goods. As a result, they may be forced to lower the price in order to stimulate demand and clear the excess supply. This imbalance in supply and demand is a common occurrence in markets and can have various economic implications.Rate this question:
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- 9.
When consumer income rises what type of good decreases in demand?
- A.
Inferior
- B.
Normal
Correct Answer
A. InferiorExplanation
When consumer income rises, the demand for inferior goods decreases. Inferior goods are those for which demand decreases as consumer income increases. This is because as consumers' income rises, they tend to switch to higher-quality goods or substitutes for the inferior goods. Therefore, when consumer income increases, the demand for inferior goods decreases.Rate this question:
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- 10.
Which 2 of the following would be considered to be normal goods?
- A.
TV/ Radio
- B.
Mobile Phone
- C.
Public Transport
- D.
Bargain Goods
Correct Answer(s)
A. TV/ Radio
B. Mobile PhoneExplanation
TV/Radio and Mobile Phone would be considered normal goods because they are both products that people typically buy more of as their income increases. As people have more disposable income, they are more likely to purchase these goods. Public transport and bargain goods, on the other hand, are not necessarily tied to income levels and may be purchased regardless of income.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Oct 23, 2011Quiz Created by
FionaKirk
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