This quiz works best with JavaScript enabled. Home > Microeconomics > Demand > Demand – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Demand Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Other things equal, if a good has more substitutes, its price elasticity of demand is: A) Larger. B) Smaller. C) Zero. D) Unity. Show Answer Correct Answer: A) Larger. 2. What is not an example of a substitute? A) Disneyland and Six Flags. B) Peanut butter and jelly. C) Hershey's and Nestle chocolate. D) Microsoft Word and Google Docs. Show Answer Correct Answer: B) Peanut butter and jelly. 3. The economist's objections to monopoly rest on which of the following grounds? A) There is a transfer of income from consumers to the monopolist. B) There is welfare loss as resources tend to be misallocated under monopoly. C) Only A is correct. D) Both A and B are correct. Show Answer Correct Answer: D) Both A and B are correct. 4. The demand curve is always ..... A) Upward sloping. B) Downward sloping. C) Level. D) Irregular. Show Answer Correct Answer: B) Downward sloping. 5. When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is A) Inelastic. B) Elastic. C) Unit elastic. D) Complementary. Show Answer Correct Answer: C) Unit elastic. 6. Land and labor and A) Capital. B) Cat. C) Cause. D) None of above. Show Answer Correct Answer: A) Capital. 7. The basic questions that every society must answer include A) What, how and for whom. B) Where, when and why. C) Which, why and what. D) When, how and which. Show Answer Correct Answer: A) What, how and for whom. 8. Real income refers to A) How much money you actually earn. B) Your income minus your taxes. C) How much your income can buy. D) Your income minus taxes and benefits. Show Answer Correct Answer: C) How much your income can buy. 9. A decrease in the price of peanut butter, will cause the demand for video games to: A) Increase. B) Decrease. C) Not change at all. D) None of above. Show Answer Correct Answer: C) Not change at all. 10. The change in total output brought about by adding one more worker A) Marginal Product. B) Specialization. C) Increasing Returns. D) Decreasing Returns. Show Answer Correct Answer: A) Marginal Product. 11. Quantity demanded changes little as price changes A) Elastic. B) Unit Elastic. C) Inelastic. D) Scarcity. Show Answer Correct Answer: C) Inelastic. 12. When the demand schedule is graphed, we create A) The law of demand. B) The demand curve. C) Demand. D) Law of diminish marginal utility. Show Answer Correct Answer: B) The demand curve. 13. Why would a store be willing to lose money on a loss-leader item? A) Making a profit is not important to the store. B) Loss-leaders will bring customers into the store. C) Customers will also purchase items with higher markups. D) Both the second and third answers are correct. Show Answer Correct Answer: D) Both the second and third answers are correct. 14. The ups and down of the economy A) Law of demand. B) Equilibrium. C) Law of supply. D) Business cycle. Show Answer Correct Answer: D) Business cycle. 15. Which factor generally keeps the price-elasticity of demand for a good low: A) Variety of uses for that good. B) Its low price. C) Close substitutes for that good. D) High proportion of the consumer's income spent on it. Show Answer Correct Answer: B) Its low price. 16. What happens when a company purposely prices their products very low, in an attempt to get people to try them? A) Equilibrium. B) Price floor. C) Surplus. D) Shortage. Show Answer Correct Answer: D) Shortage. 17. Characteristics of equilibrium include A) Where supply and demand intersect. B) Where QS = QD. C) No shortage and no surplus. D) All of these. Show Answer Correct Answer: D) All of these. 18. Which of the following is true about allocative efficiency? A) Social welfare is maximized. B) Social marginal benefits equals social marginal cost. C) It happens only at market equilibrium where community surplus is maximized. D) All the choices given are valid. Show Answer Correct Answer: D) All the choices given are valid. 19. In the price system of a market economy, prices are determined by A) Central planning. B) Market forces. C) Political forces. D) Private investors. Show Answer Correct Answer: B) Market forces. 20. What shows the quantities of products demanded at each price by all consumers in a market A) Demand schedule. B) Demand. C) Supply. D) None of above. Show Answer Correct Answer: A) Demand schedule. ← PreviousNext →Related QuizzesMicroeconomics QuizzesDemand Quiz 1Demand Quiz 2Demand Quiz 3Demand Quiz 4Demand Quiz 5Demand Quiz 6Demand Quiz 7Demand Quiz 9Demand Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books