Supply & Demand
100: What happens to quantity demanded when price falls?
a) Stays the same
b) Decreases
c) Increases
d) Shifts right
e) Shifts left
c) Increases
100: What happens to prices when there’s a surplus?
a) Rise
b) Fall
c) Stay constant
d) Government raises taxes
e) Demand shifts left
b) Fall
100: If demand is elastic, how do buyers react to price changes?
a) Barely change
b) Drastically change
c) Stay the same
d) Buy none
e) Always buy more
b) Drastically change
100: Which pair are substitutes?
a) Burger and fries
b) Coke and Pepsi
c) Printer and ink
d) Car and gas
e) Phone and charger
b) Coke and Pepsi
100: In which market are firms price takers?
a) Monopoly
b) Oligopoly
c) Perfect competition
d) Monopolistic competition
e) Natural monopoly
c) Perfect competition
200: What happens to quantity supplied when price rises?
a) Decreases
b) Increases
c) Stays constant
d) Shifts left
e) Demand falls
b) Increases
200: What happens to prices when there’s a shortage?
a) Rise
b) Fall
c) Stay constant
d) Supply shifts right
e) Demand shifts left
a) Rise
200: Which product is most inelastic?
a) Concert tickets
b) Designer handbags
c) Gasoline
d) Soda
e) Sneakers
c) Gasoline
200: Which pair are complements?
a) Coffee and sugar
b) Pizza and burgers
c) Netflix and Hulu
d) Shoes and sandals
e) Milk and water
a) Coffee and sugar
200: Which is closest to a monopoly?
a) Local water utility
b) McDonald’s
c) Airline industry
d) Tech companies
e) Clothing stores
a) Local water utility
300: What is the point where supply equals demand?
a) Shortage
b) Surplus
c) Price ceiling
d) Equilibrium
e) Revenue
d) Equilibrium
300: A store sets prices too high and can’t sell inventory. What is this?
a) Shortage
b) Surplus
c) Equilibrium
d) Monopoly
e) Price floor
b) Surplus
300: Which factor makes demand more elastic?
a) Fewer substitutes
b) Luxury good
c) Necessity
d) Small share of income
e) Government tax
b) Luxury good
300: If the price of Coke rises, what happens to Pepsi demand?
a) Falls
b) Stays constant
c) Rises
d) Disappears
e) Shifts left
c) Rises
300: Which feature defines monopolistic competition?
a) One seller
b) Identical products
c) Differentiated products
d) Collusion
e) Price taking
c) Differentiated products
400: If price is set above equilibrium, what occurs?
a) Shortage
b) Surplus
c) Equilibrium
d) Demand shifts right
e) Supply shifts left
b) Surplus
400: Why do shortages push prices up?
a) Sellers cut prices
b) Government orders
c) Buyers compete for limited supply
d) Technology improves
e) Demand falls
c) Buyers compete for limited supply
400: If demand is elastic and price increases, what happens to revenue?
a) Rises
b) Falls
c) Stays constant
d) Becomes unpredictable
e) Government regulates
b) Falls
400: If peanut butter prices rise, what happens to jelly demand?
a) Falls
b) Rises
c) Stays constant
d) Surplus forms
e) Shifts right
a) Falls
400: Why is the airline industry considered an oligopoly?
a) One firm dominates
b) Many small firms compete
c) Few large firms dominate
d) No entry barriers
e) Products identical
c) Few large firms dominate
500: Which of the following is a non-price factor that shifts supply?
a) Change in consumer taste
b) Price of the good itself
c) Technology improvements
d) Quantity demanded
e) Equilibrium
c) Technology improvements
500: Which example best represents a shortage?
a) Holiday toys sell out instantly
b) Gas stations reduce prices due to low demand
c) Grocery store shelves overstocked with bread
d) Price set at equilibrium
e) Internet subscription services compete
a) Holiday toys sell out instantly
500: Which product is the best example of inelastic demand? Must explain why.
a) Insulin
b) Video games
c) Streaming subscriptions
d) Coffee
e) Jeans
a) Insulin
500: Cross-price elasticity measures:
a) How demand changes when supply shifts
b) How supply changes with income
c) How demand for one good changes when another’s price changes
d) How prices adjust at equilibrium
e) Government regulation of prices
c) How demand for one good changes when another’s price changes
500: How does pricing differ in monopoly vs. perfect competition?
a) Monopoly = price maker; Perfect competition = price taker
b) Both set prices freely
c) Both accept market price
d) Monopoly = identical products; Perfect comp = differentiated
e) Neither influenced by demand
a) Monopoly = price maker; Perfect competition = price taker