This quiz works best with JavaScript enabled. Home > Microeconomics > Prices > Markets And Prices – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Markets And Prices Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A surplus causes A) New workers to be hired. B) Producers to increase their price to the equilibrium price. C) Consumers to pay more for goods. D) Producers to lower their to the equilibrium price. Show Answer Correct Answer: D) Producers to lower their to the equilibrium price. 2. What is an important indicator about the relative scarcity of a product or service? A) How well known it is. B) The "invisible hand". C) Its cost of production. D) Its market price. Show Answer Correct Answer: D) Its market price. 3. Which one of the following best describes the relationship between the demand for air travel and the demand for airline pilots? A) Composite demand. B) Derived demand. C) Joint demand. D) Complementary demand. Show Answer Correct Answer: B) Derived demand. 4. A product has a price elasticity of supply of +1.5. If its price falls from £10.00 to £8.00, its supply will A) Decrease by 30%. B) Decrease by 40%. C) Increase by 30%. D) Increase by 40%. Show Answer Correct Answer: A) Decrease by 30%. 5. As price for a good or service goes up, how does that typically affect the quantity demanded? A) It increases. B) It decreases. C) It does not change. D) None of above. Show Answer Correct Answer: B) It decreases. 6. Which of these is most likely to lead directly to a black market? A) Supply shock. B) Price floor. C) Rationing. D) Equilibrium. Show Answer Correct Answer: C) Rationing. 7. A price ceiling ..... A) Would be below the equilibrium. B) Would be at the equilibrium. C) Would be above the equilibrium. D) None of above. Show Answer Correct Answer: A) Would be below the equilibrium. 8. When a price ceiling is in place keeping the price below the market price, which is true of the quantity demanded & quantity supplied? A) Quantity Demanded is greater. B) Quantity Supplied is greater. C) Quantity Demanded equals Quantity supplied. D) None of above. Show Answer Correct Answer: A) Quantity Demanded is greater. 9. A business is likely to charge a high price when: A) There is a lot of competition in a market. B) Its products are aimed at customers with a low income. C) It launches a new, innovative product onto the market. D) When a product is of a low quality compared to its competitors. Show Answer Correct Answer: C) It launches a new, innovative product onto the market. 10. What is the main form of communication between the producer and consumer? A) Price. B) Commercials. C) Supply. D) Revenue. Show Answer Correct Answer: A) Price. 11. If there is a surplus in the market, the price is likely to ..... A) Increase. B) Decrease. C) Fluctuate. D) Stay the same. Show Answer Correct Answer: B) Decrease. 12. When buyers purchase exactly as much as sellers are willing to sell, what is reached? A) Supply and Demand. B) Excess Demand. C) Equilibrium. D) Price Floor. Show Answer Correct Answer: C) Equilibrium. 13. A price floor ..... A) Would be below the equilibrium. B) Would be at the equilibrium. C) Would be above the equilibrium. D) None of above. Show Answer Correct Answer: C) Would be above the equilibrium. 14. Profit as a percentage of the selling price A) Retained profit. B) Profit margins. C) Net profit. D) Cost-plus pricing. Show Answer Correct Answer: B) Profit margins. 15. The price elasticity of demand for a good made by a firm is-0.6. If the firm raises the price of the good, its revenues will A) Rise. B) Stay the same. C) Fall by more than 6 per cent. D) Fall by less than 6 per cent. Show Answer Correct Answer: A) Rise. 16. Adam Smith encourages a market economy to limit the role of the government, because when the government interferes in the economy there is a negative impact on A) Public support for the government. B) Producers only. C) Growth. D) Consumers only. Show Answer Correct Answer: C) Growth. 17. As price for a good or service goes up, how does that typically affect the quantity supplied? A) It increases. B) It decreases. C) It does not change. D) None of above. Show Answer Correct Answer: A) It increases. 18. Income elasticity of demand is positive when demand and income change in the same direction. A positive YED indicates that the good in question is ..... A) An inferior good. B) A normal good. C) A luxury good. D) None of above. Show Answer Correct Answer: B) A normal good. 19. A new company in town creating the same product as you would cause ..... A) The demand to shift to the right. B) The demand to shift to the left. C) The supply to shift to the right. D) The supply to shift to the left. Show Answer Correct Answer: C) The supply to shift to the right. 20. The income elasticity of demand for bus travel is-1.5. This means that A) A 10% increase in fares will lead to a 15% decrease in passengers. B) Bus travel is an inferior good. C) Bus travel has a negative cross elasticity of demand. D) As unemployment falls, more people will use buses. Show Answer Correct Answer: B) Bus travel is an inferior good. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarkets And Prices Quiz 1Markets And Prices Quiz 2Markets And Prices Quiz 3Markets And Prices Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books