This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Demand And Supply Analysis > Demand And Supply Analysis – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Demand And Supply Analysis Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Everything else held constant, an autonomous monetary policy easing ..... aggregate ..... A) Decreases; demand. B) Increases; demand. C) Decreases; supply. D) Increases; supply. Show Answer Correct Answer: B) Increases; demand. 2. A change in government subsidies. A) Shift in Supply. B) Shift in Demand. Show Answer Correct Answer: A) Shift in Supply. 3. What is Price? A) When the selling price is less than the cost. B) The actual earning. C) The amount he or she sells the product for. D) The amount a producer spends on producing a good or service. Show Answer Correct Answer: C) The amount he or she sells the product for. 4. The amount of goods or services available is called? A) Supply. B) Demand. C) Market. D) Consumer. Show Answer Correct Answer: A) Supply. 5. What happens if the price in the market is higher than the equilibrium price? A) No effect on demand or supply. B) Excess demand. C) Excess supply. D) Market equilibrium. Show Answer Correct Answer: C) Excess supply. 6. Demand curve remain the same, Only shift in equilibrium point due to change in prices is known as A) Shift in demand. B) Movement along the supply Curve. C) Movement along the Demand Curve. D) Shift in supply. Show Answer Correct Answer: C) Movement along the Demand Curve. 7. What is the term for a situation of excess supply or excess demand? A) Market fluctuation. B) Market stability. C) Market disequilibrium. D) Market equilibrium. Show Answer Correct Answer: C) Market disequilibrium. 8. Who is a Producer? A) A producer is someone who grows or makes something to be sold. B) Consumers are people who use goods or services. Show Answer Correct Answer: A) A producer is someone who grows or makes something to be sold. 9. A brand new machine cooks, cleans, and never messes up a fast food order. This means we can sell more fast food than ever before, leading to producers cutting cost of fast food. Which supply factor does this most likely relate to? A) Change in Technology. B) Change in Profit Opportunities Producing other Products. C) Change in Producers' Price Expectations. D) None of above. Show Answer Correct Answer: A) Change in Technology. 10. What is the effect of an improvement in technology on the cost of producing cars? A) Shifts the demand curve to the left. B) Shifts the demand curve to the right. C) Shifts the supply curve to the left. D) Shifts the supply curve to the right. Show Answer Correct Answer: D) Shifts the supply curve to the right. 11. A profit maximum is least likely to occur when: A) Average total cost is minimized. B) Marginal revenue equals marginal cost. C) The difference between total revenue and total cost is maximized. D) None of above. Show Answer Correct Answer: A) Average total cost is minimized. 12. When quantity demanded of a commodity changes due to a change in its price, keeping other factors constant is known as A) Movement along the Demand Curve. B) Movement along the Supply curve. C) Shift in demand. D) Shift in supply. Show Answer Correct Answer: A) Movement along the Demand Curve. 13. What is the function of price in resource allocation? A) Transmission of preferences. B) All of the above. C) Provision of incentives. D) Signalling. Show Answer Correct Answer: B) All of the above. 14. In an attempt to appease the Wagon Wheel Manufacturer's lobby, that is concerned about declining sales and thus declining profits, the government imposes a price floor above the equilibrium price for wagon wheels, prohibiting retailers from selling them at prices below the floor. How will this policy likely impact the market for wagon wheels? A) Wagon wheel profits will boom, revitalizing the market for them. B) This policy will encourage more people to start wagon wheel producing businesses. C) There will be a shortage of wagon wheels, as the price increase will create a false sense of scarcity among consumers. D) There will be a surplus of unsold wagon wheels, and the industry will continue to decline. Show Answer Correct Answer: D) There will be a surplus of unsold wagon wheels, and the industry will continue to decline. 15. What happens to equilibrium price and quantity when both demand and supply curves shift to the right? A) Equilibrium price falls and quantity decreases. B) Equilibrium price rises and quantity increases. C) Equilibrium price falls and quantity increases. D) Equilibrium price rises and quantity decreases. Show Answer Correct Answer: B) Equilibrium price rises and quantity increases. 16. Suppose the economy is producing at the natural rate of output and the government passes legislation that severely restricts a company's ability to reduce production costs via outsourcing. Everything else held constant, this policy action will cause ..... in the unemployment rate in the short run and ..... in inflation in the short run. A) A decrease; an increase. B) A decrease; a decrease. C) An increase; an increase. D) No change; no change. Show Answer Correct Answer: C) An increase; an increase. 17. Is this True or FalsePrice high O Supply high A) True. B) False. C) Maybe. D) None of above. Show Answer Correct Answer: A) True. 18. A product that had been popular is rapidly becoming less popular, as consumer tastes begin to change. How will this affect the market price and quantity for that product? A) Price will decrease, quantity will increase. B) Price and quantity will both increase. C) Price will increase, quantity will decrease. D) Price and quantity will both decrease. Show Answer Correct Answer: D) Price and quantity will both decrease. 19. When quantity demanded of a commodity changes due to a change in other factors keeping price constant is known as A) Movement along the Demand Curve. B) Movement along the Supply curve. C) Shift in demand. D) Shift in supply. Show Answer Correct Answer: C) Shift in demand. 20. A permanent negative supply shock leads to ..... output ..... A) Higher; in both the short and long runs. B) Higher; in the short run but not in the long run. C) Lower; in both the short and long runs. D) Lower; in the short run but not in the long run. Show Answer Correct Answer: C) Lower; in both the short and long runs. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesDemand And Supply Analysis Quiz 1Demand And Supply Analysis Quiz 2Demand And Supply Analysis Quiz 4Demand And Supply Analysis Quiz 5Demand And Supply Analysis Quiz 6Demand And Supply Analysis Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books