Microeconomics Supply and Demand questions and Answers
Question: An increase in product prices will cause
(a) quantity demanded to decrease
(b) quantity supplied to decrease
(c) quantity demanded to increase
(d) the demand curve to shift to the left
Question: Supply creates its own demand is the basis of:
(a) Classical economics
(b) Keynesian economics
(c) Monetarism
(d) None of these
Question: The quantity demanded depends on
(a) its price
(b) income
(c) price of other goods
(d) all of the above
Related: Economic development questions and answers
Question: When output exceeds spending:
(a) There is unsold output, and the level of output will fall.
(b) There is unsold output, and the level of output will rise.
(c) There is unsold output, and the level of spending will rise.
(d) There is no unsold output since the level of spending will rise
Question: In the case of a horizontal demand curve , the price elasticity of demand is
(a) equal to zero
(b) equal to one
(c) equal to two
(d) infinite
Question: The concept of effective demand is associated with the name of
(a) Marshall
(b) Keynes
(c) Krugman
(d) Say
Related: mcq on managerial economics
Question: Price elasticity of demand shows the relationship between demand for a commodity and
(a) price of other commodities
(b) price of that commodity
(c) tastes and preferences of the consumer
(d) income of the consumer
Question: If a consumer’s income increases, the demand for normal products:
(a) will remain unchanged
(b) will necessarily increase
(c) will necessarily decrease
(d) may increase or decrease
Question: Cross-price elasticity of demand between tea and coffee is
(a) negative
(b) positive
(c) zero
(d) infinite
Related: International Trade Quiz
Question: Demand curve remaining the same, if the supply curve shifts to the right then
(a) Price and quantity move in the same direction
(b) Price and quantity move in the opposite direction
(c) Price and quantity remain unchanged
(d) None of the above
Question: A rightward shift in the supply schedule indicates
(a) a decrease in supply
(b) an increase in supply
(c) an increase in quantity supply
(d) a decrease in quantity supply
Question: __ Profits are
(a) the most important objective for a firm
(b) the result of supply and demand
(c) a function of revenue and expenses
(d) depends primarily on the quantity of product sold
