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Market Equilibrium and Shifts in Supply and Demand Online Quiz Questions

Use this free practice quiz with 20 questions to review Market Equilibrium and Shifts in Supply and Demand, test your knowledge, and prepare for your next test or exam.

20 questions
01
Fill in the blank
1 point

At market equilibrium, quantity demanded equals .

02
True or false
1 point

True or false: The intersection of the demand and supply curves identifies market equilibrium, with equilibrium price on the vertical axis and equilibrium quantity on the horizontal axis.

  1. A

    True

  2. B

    False

03
Written response
1 point

A market’s demand and supply curves intersect at a price of $4 and a quantity of 6 units. What is the equilibrium quantity?

04
Choose one
1 point

If a market price is held above its equilibrium level, what condition results?

  1. A

    A surplus, because quantity supplied exceeds quantity demanded

  2. B

    A shortage, because quantity demanded exceeds quantity supplied

  3. C

    Equilibrium, because buyers and sellers plan the same quantity

  4. D

    A shift in demand, because the price is above equilibrium

05
True or false
1 point

True or false: If the good’s own price changes while other factors remain constant, its demand curve shifts to a new position.

  1. A

    True

  2. B

    False

06
Fill in the blank
1 point

If input costs rise for producers, supply decreases and the supply curve shifts .

07
Written response
1 point

Income rises for buyers of a normal good. In which direction does the good’s demand curve shift?

08
Choose one
1 point

Assuming the usual downward-sloping demand and upward-sloping supply curves, what happens when demand shifts right and supply does not shift?

  1. A

    Equilibrium price falls and quantity rises

  2. B

    Equilibrium price and quantity both rise

  3. C

    Equilibrium price rises and quantity falls

  4. D

    Both equilibrium price and quantity are indeterminate

09
Choose all
1 point

Select all changes that would increase demand for a normal good, shifting its demand curve right.

  1. A

    More buyers enter the market

  2. B

    The good becomes more popular

  3. C

    Buyers’ income falls for a normal good

  4. D

    The price of a substitute rises

  5. E

    Buyers’ income rises for a normal good

  6. F

    The price of a substitute falls

10
Choose all
1 point

Select all changes that can increase supply and shift the supply curve right.

  1. A

    Input costs decrease

  2. B

    Input costs increase

  3. C

    Production technology improves

  4. D

    Production conditions become more favorable

  5. E

    Production conditions become less favorable

11
Choose one
1 point

Demand shifts while supply’s determinants remain unchanged. What happens to the supply curve as the market moves to its new equilibrium?

  1. A

    The other curve must shift in the same direction

  2. B

    The other curve must shift in the opposite direction

  3. C

    The new equilibrium causes movement along the other curve, which itself remains in place

  4. D

    The market cannot reach a new equilibrium

12
Choose one
1 point

Demand increases while supply decreases. Under the usual curve assumptions, what can be concluded about the new equilibrium?

  1. A

    Equilibrium price rises; the change in equilibrium quantity is ambiguous

  2. B

    Equilibrium price falls; equilibrium quantity rises

  3. C

    Equilibrium price rises; equilibrium quantity falls

  4. D

    The changes in both equilibrium price and quantity are ambiguous

13
Open ended
1 point

Demand and supply both increase in a market. Explain what happens to equilibrium quantity and whether the direction of the equilibrium price change can be determined from the shift directions alone.

14
Choose one
1 point

Demand and supply both shift left. What is the expected result under the usual curve assumptions?

  1. A

    Equilibrium price falls and quantity rises

  2. B

    Equilibrium price rises and quantity falls

  3. C

    Equilibrium quantity falls; the price change is ambiguous

  4. D

    Both equilibrium price and quantity are ambiguous

15
Written response
1 point

What is the standard economics term for the condition that occurs when a market price is above equilibrium and the quantity supplied exceeds the quantity demanded?

16
Choose one
1 point

A market price is below its equilibrium price. What condition results?

  1. A

    A surplus, because sellers plan to sell more than buyers plan to purchase

  2. B

    A shortage, because buyers plan to purchase more than sellers plan to sell

  3. C

    An equilibrium, because planned purchases equal planned sales

  4. D

    A supply increase, because sellers offer more at lower prices

17
Choose one
1 point

The price of a good rises, while all non-price factors affecting its market remain unchanged. How does this change appear on the supply graph?

  1. A

    Supply shifts right because sellers offer more

  2. B

    Supply shifts left because the good becomes more expensive

  3. C

    There is a movement along the supply curve

  4. D

    Demand shifts right because the price increased

18
Choose one
1 point

Input costs for producing a good rise, while demand and other supply factors remain unchanged. What happens to the curve and the new equilibrium?

  1. A

    Supply shifts left; equilibrium price rises and quantity falls

  2. B

    Supply shifts right; equilibrium price falls and quantity rises

  3. C

    Demand shifts left; equilibrium price and quantity fall

  4. D

    Demand shifts right; equilibrium price and quantity rise

19
True or false
1 point

If demand shifts while supply does not, the new equilibrium causes movement along the existing supply curve rather than shifting that curve.

  1. A

    True

  2. B

    False

20
Written response
1 point

What is the standard term for the market condition in which the amount buyers plan to purchase equals the amount sellers plan to sell?