Quiz
1.1 Competitive Markets: Demand and Supply
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Questions in this quiz (19)
1Scarcity is not a requirement for a market to exist.
- ATrue
- BFalse
2The law of demand states that the [blank_start]quantity demanded[blank_end] for a good or service falls as its [blank_start]price[blank_end] rises. The demand curve shows an [blank_start]inverse[blank_end] relationship between these.
- Aquantity demanded
- Bprice
- Cinverse
3Three Causes of Negative Relationship between Price and Quantity Demanded
- AIncome Effect
- BWealth Effect
- CSubstitution Effect
- DDiminishing Marginal Returns
- EExpansion Effect
- FLaw of Demand
- GProduction Effect
4[blank_start]Income[blank_end] Effect: As price falls, the real income of consumers rises.
- AIncome
5[blank_start]Substitution[blank_end] Effect: As the price of a good or service falls, more customers are able to pay, so they are more likely to buy the product.
- ASubstitution
6[blank_start]Diminishing Marginal Returns[blank_end]: As people consume more of a particular good or service, the utility gained from the marginal unit declines, so customers will only purchase more at a lower price.
- ADiminishing Marginal Returns
7Non-Price Determinants of Demand (HIS AGE)
H: [blank_start]Habits[blank_end]
I: [blank_start]Income[blank_end]
S: [blank_start]Substitutes[blank_end]
A: [blank_start]Advertising[blank_end]
G: [blank_start]Government Policies[blank_end]
E: [blank_start]Economy[blank_end]- AHabits
- BIncome
- CSubstitutes
- DAdvertising
- EGovernment Policies
- FEconomy
8The demand for [blank_start]normal[blank_end] goods rises with an increase in income. The demand for [blank_start]inferior[blank_end] goods rises with a decrease in income.
- Anormal
- Binferior
9A price rise will cause a [blank_start]contraction[blank_end] in the quantity demanded for the product. A price fall will cause an [blank_start]expansion[blank_end] in the quantity demanded.
- Acontraction
- Bexpansion
10Qd = a - bP where (a) is demand, irrespective of price and (-b) is the slope of the demand curve
- ATrue
- BFalse
11The Law of Supply states there is a positive relationship between the [blank_start]Quantity Supplied[blank_end] of the Product and its [blank_start]price[blank_end].
- AQuantity Supplied
- Bprice
12Supply is the willingness and ability of firms to provide a good or service at a given price level, per time period.
- ATrue
- BFalse
13A [blank_start]shift[blank_end] in supply is caused by changes in non-price factors that affect supply. A [blank_start]movement[blank_end] in supply is caused only by changes in price.
- Ashift
- Bmovement
14Non-Price Determinants of Supply (SWATCH)
S: [blank_start]Subsidies[blank_end]
W: [blank_start]Weather[blank_end]
A: [blank_start]Advancements in Technology[blank_end]
T: [blank_start]Time[blank_end]
C: [blank_start]Competitive Supply[blank_end]
H: [blank_start]Hurdles[blank_end]- ASubsidies
- BWeather
- CAdvancements in Technology
- DTime
- ECompetitive Supply
- FHurdles
15Qs = c + dP where (c) is the slope and (+d) is the supply, irrespective of price.
- ATrue
- BFalse
16The [blank_start]signaling function[blank_end] of price tells producers whether to enter or leave the market.
- Asignaling function
- Bincentive function
17Which is the consumer and producer surplus?
- AConsumer Surplus
- BProducer Surplus
- CConsumer Surplus
- DProducer Surplus
18Label the production possibility curve (PPC).
- AUnattainable without Economic Growth
- BAllocative Inefficiency
- CAllocative Efficiency
- DUnattainable without Economic Growth
- EAllocative Inefficency
- FAllocative Efficiency
- GUnattainable without Economic Growth
- HAllocative Efficiency
- IAllocative Inefficiency
19With allocative efficiency, no one can be made better off without making someone worse off.
- ATrue
- BFalse
Information
- Description
- Book: Economics for the IB Diploma Study and Revision Guide (Hodder) Standards: Nature of Markets Law of Demand Demand Curve Nonprice Determinants of Demand Shifts Along Demand Curve Linear Demand Functions Law of Supply Supply Curve Non-price determinants of Supply Equilibrium/changes to Equilibrium Equilibrium Linear Equations Resoure Allocation Consumer Surplus Producer Surplus Allocative Efficiency
- Author
- Hayle Short
- Language
- English
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- 55
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