Supply and Demand Quiz

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Which of the following best defines demand?

The desire for a good or service and the willingness to pay for it

The desire for a good or service and the ability to pay for it (correct)

The desire for a good or service

The desire for a good or service and the ability to afford it

Which of the following is an example of demand?

Joe wanting to buy a new house

Joe wanting to buy a new Toyota car (correct)

Joe wanting to buy a new phone

Joe wanting to buy a Rolls Royce Phantom

What does the law of demand state?

Buyers purchase more of an item when it is less expensive (correct)

Sellers sell more products when prices are higher

Buyers purchase more of an item when it is more expensive

Sellers sell more products when prices are lower

Which brand of jeans usually sells at a price closer to $100 per pair?

Miss Me Signup and view all the answers

Why are Wrangler jeans produced at a higher rate than Miss Me jeans?

Wrangler jeans have a greater demand Signup and view all the answers

What is the substitution effect?

When buyers react to a price increase by purchasing a different product Signup and view all the answers

What is the income effect?

When buyers react to a price increase by buying less of a product Signup and view all the answers

Which of the following is an example of a factor that affects supply?

Increase in labor cost Signup and view all the answers

What does ceteris paribus mean?

All other things held constant Signup and view all the answers

What is a subsidy?

A government payment that supports production Signup and view all the answers

Why might producers make fewer products if the demand for a product is not sustainable at an increased price?

To avoid losing money Signup and view all the answers

Which of the following is NOT a factor that affects supply?

Price changes Signup and view all the answers

What can be a result of an increase in labor cost, materials, utilities, and shipping?

Increase in supply Signup and view all the answers

What is the purpose of government subsidies?

To increase production Signup and view all the answers

What is an example of a product that may have heavy taxes to reduce demand?

Tobacco products Signup and view all the answers

Which of the following is an example of the substitution effect?

Consumers buying Quizno's subs instead of Subway subs Signup and view all the answers

What is the main difference between the substitution effect and the income effect?

The substitution effect involves buying a different product, while the income effect involves buying more or less of the same product Signup and view all the answers

What is the law of supply?

Sellers offer more goods for sale as prices increase Signup and view all the answers

Which of the following is an example of a product with a limited supply?

Autographed Mickey Mantle baseball bats Signup and view all the answers

Which of the following is a requirement for there to be demand for a good or service?

The ability to pay for the good or service Signup and view all the answers

Based on the text, why does the law of demand state that buyers purchase more of an item when it is less expensive?

Consumers can afford more of a product if it is less expensive Signup and view all the answers

Why does the law of demand not apply to Joe's desire to purchase a Rolls Royce Phantom?

Joe does not have the financial ability to purchase it Signup and view all the answers

Which of the following best describes the concept of demand?

The desire for a good or service and the ability to pay for it Signup and view all the answers

Which of the following is an example of a demand?

Joe wanting to buy a new Toyota car Signup and view all the answers

According to the law of demand, what happens to the quantity of a product that buyers purchase when its price increases?

It decreases Signup and view all the answers

Supply and Demand Quiz

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Questions and Answers

Which of the following best defines demand?

Which of the following is an example of demand?

What does the law of demand state?

Which brand of jeans usually sells at a price closer to $100 per pair?

Why are Wrangler jeans produced at a higher rate than Miss Me jeans?

What is the substitution effect?

What is the income effect?

Which of the following is an example of a factor that affects supply?

What does ceteris paribus mean?

What is a subsidy?

Why might producers make fewer products if the demand for a product is not sustainable at an increased price?

Which of the following is NOT a factor that affects supply?

What can be a result of an increase in labor cost, materials, utilities, and shipping?

What is the purpose of government subsidies?

What is an example of a product that may have heavy taxes to reduce demand?

Which of the following is an example of the substitution effect?

What is the main difference between the substitution effect and the income effect?

What is the law of supply?

Which of the following is an example of a product with a limited supply?

Which of the following is a requirement for there to be demand for a good or service?

Based on the text, why does the law of demand state that buyers purchase more of an item when it is less expensive?

Why does the law of demand not apply to Joe's desire to purchase a Rolls Royce Phantom?

Which of the following best describes the concept of demand?

Which of the following is an example of a demand?

According to the law of demand, what happens to the quantity of a product that buyers purchase when its price increases?

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