This quiz works best with JavaScript enabled. Home > Microeconomics > Prices > Markets And Prices – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Markets And Prices Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is NOT a characteristic of the price system? A) It is neutral. B) It is flexible. C) It prevents shortages. D) It is efficient. Show Answer Correct Answer: C) It prevents shortages. 2. Suppliers often reduce prices because they A) Have a shortage of products to sell. B) Have a surplus of products to sell. C) Want to decrease consumer demand. D) Want to increase the product supply. Show Answer Correct Answer: B) Have a surplus of products to sell. 3. Which of the following is NOT true about a market supply and demand curve? A) Supply slopes upward; demand slopes downward. B) The curves intersect at equilibrium. C) There are two curves on one graph. D) Supply slopes downward; demand slopes upward. Show Answer Correct Answer: D) Supply slopes downward; demand slopes upward. 4. What is meant by the term disequilibrium? A) When quantity supplied and quantity demanded are not the same. B) A sudden lack of goods. C) Smallest amount that can be paid to a worker. D) When quantity supplied and quantity demanded are equal. Show Answer Correct Answer: A) When quantity supplied and quantity demanded are not the same. 5. All other things being equal, supply curves slope upwards from left to right because A) Higher prices lead to higher costs. B) Higher prices lead to higher output. C) Lower prices lead to higher demand. D) Higher prices lead to higher profits. Show Answer Correct Answer: D) Higher prices lead to higher profits. 6. At which stage in the product life cycle might a business reduce the selling price of a product to clear stock that is no longer in demand? A) Introduction. B) Growth. C) Maturity. D) Decline. Show Answer Correct Answer: D) Decline. 7. The financial and opportunity costs consumers pay when searching for a good or service A) Marginal cost. B) Search costs. C) Fixed costs. D) Variable costs. Show Answer Correct Answer: B) Search costs. 8. The definition of laissez-faire literally means ..... A) Price mechanism. B) Natural rights. C) Market structures. D) Let it happen. Show Answer Correct Answer: D) Let it happen. 9. Due to rising car traffic, demand for bicycles has increased. The new equilibrium will show: A) More bikes sold, but at a higher price. B) Fewer bikes sold, but at a higher price. C) More bikes sold, but at a lower price. D) Fewer bikes sold, but at a lower price. Show Answer Correct Answer: A) More bikes sold, but at a higher price. 10. Equilibrium prices rise when? A) Demand decreases; supply increases. B) Demand increases; supply increases. C) Demand increases; supply decreases. D) Demand decreases; supply decreases. Show Answer Correct Answer: C) Demand increases; supply decreases. 11. The price elasticity of supply for most goods is A) Zero. B) Between zero and-1. C) Between-1 and minus infinity. D) Positive. Show Answer Correct Answer: D) Positive. 12. The market clearing price is also called the A) Equilibrium price. B) Fair market price. C) Unit price. D) Sale price. Show Answer Correct Answer: A) Equilibrium price. 13. A price ceiling placed on the amount people pay for housing is called ..... A) Housing control. B) Rent control. C) Minimum wage. D) Maximum costs. Show Answer Correct Answer: B) Rent control. 14. The stage in the product life cycle at which a low price might be charged in order to establish a product in a competitive market is: A) Introduction. B) Growth. C) Maturity. D) Decline. Show Answer Correct Answer: A) Introduction. 15. Any legally set price for a goods or services ..... A) Price Ceiling. B) Minimum Wage. C) Price Floor. D) Price Control. Show Answer Correct Answer: D) Price Control. 16. "Wealth of Nations" a book by Adam Smith pushed the importance of A) Government ownership. B) Large corporations. C) Supply and demand. D) Tradition. Show Answer Correct Answer: C) Supply and demand. 17. An industry that is dominated by a few large firms is ..... A) An oligopoly. B) A monopoly. C) A competitive market. D) None of above. Show Answer Correct Answer: A) An oligopoly. 18. The Law of Demand states that as price decreases ..... A) Quantity demanded decreases. B) Quantity demanded increases. C) Production increases. D) Quality Decreases. Show Answer Correct Answer: B) Quantity demanded increases. 19. What happens when the supply of a good is greater than the demand? A) The good is discarded. B) The good becomes a luxury and price rises. C) Either the good remains unsold or the price drops. D) Either the good is saved for later sale or the price goes up. Show Answer Correct Answer: C) Either the good remains unsold or the price drops. 20. What is a market where goods are sold illegally? A) Factor Market. B) Product Market. C) Wal-Mart. D) Black Market. Show Answer Correct Answer: D) Black Market. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarkets And Prices Quiz 1Markets And Prices Quiz 2Markets And Prices Quiz 4Markets And Prices Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books