High School Economics Quiz: Laws Of Demand And Supply

What this quiz covers

This quiz focuses on Laws Of Demand And Supply, giving you a quick way to practice the rules, question types, and explanations that matter most for High School Economics.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

Question 1

1. They will increase their quantity supplied because the higher price makes it profitable to harvest timber from less accessible or higher-cost areas. (correct answer)
2. They will increase their quantity supplied primarily to meet the higher demand from construction companies and maintain good business relations.
3. Their overall supply will increase because the higher price allows them to invest in new technologies that make logging more efficient.
4. They will decrease their quantity supplied in the short term, holding back inventory to speculate on even higher future prices.

Question 2

1. The consumer's real purchasing power is reduced by the price increase, and chicken has become a relatively cheaper alternative. (correct answer)
2. The consumer's personal preference for beef diminishes due to the higher price, and the overall supply of chicken increases.
3. The quality of beef is now perceived as lower because of the price hike, and the consumer's income has effectively increased.
4. The consumer can no longer afford to purchase any beef at all, and the price of chicken is now expected to fall in the future.

Question 3

1. Producers face increasing marginal costs, meaning each additional unit is more expensive to produce and requires a higher price to justify its production. (correct answer)
2. Producers are simply responding to the higher quantity demanded by consumers that exists at a new, higher equilibrium price.
3. Producers often experience economies of scale, where producing more units becomes progressively cheaper per unit, encouraging them to increase output.
4. Producers are motivated by profit and will always seek to sell as much as they can physically produce, regardless of the market price.

Question 4

1. The law of demand still holds; the prestige associated with the higher price is a non-price determinant that shifts the entire demand curve to the right. (correct answer)
2. This is a documented exception where the law of demand is invalid, as some luxury goods (Veblen goods) have an upward-sloping demand curve.
3. The supply of the paintings is perfectly inelastic, and this unique supply condition is what negates the typical effects of the law of demand.
4. The increase in price caused a direct increase in the quantity demanded, which is a rare but predictable exception for goods purchased for status.

Question 5

1. The farmer will decrease the quantity of corn supplied. (correct answer)
2. The farmer will increase the supply of corn due to the lower production costs from the fertilizer.
3. The farmer will increase the quantity of soybeans supplied as they become relatively more profitable.
4. The farmer will maintain the same quantity of corn supplied to ensure all fixed costs are covered for the season.

Question 6

1. The price reduction caused an increase in the quantity demanded for strawberries. (correct answer)
2. The sale caused an increase, or a rightward shift, in the demand for strawberries.
3. The quantity supplied of strawberries increased because the store sold more units to consumers.
4. Consumer preferences for strawberries temporarily increased for one day, leading to the higher sales.

Question 7

1. The concept of consumer surplus, which is the difference between what a consumer is willing to pay and the market price.
2. The principle of increasing marginal cost, which makes it more expensive for firms to produce additional units of a good.
3. The economic goal of maximizing total utility, which drives consumers to always purchase as many goods as they can afford.
4. The principle of diminishing marginal utility, which states that the satisfaction from consuming each additional unit of a good decreases. (correct answer)

Question 8

1. The quantity of seats supplied would decrease to exactly match the lower quantity demanded that would result from the higher price.
2. The quantity of seats supplied would increase, as the higher price incentivizes the stadium to make more temporary seating available.
3. The law of supply dictates the supply of seats must increase because the team is more willing to sell tickets at a higher price.
4. The law of supply is not directly applicable in this short-run context because the quantity of seats supplied is fixed and cannot increase. (correct answer)

Question 9

1. means that the price decrease was not significant enough to affect consumer behavior as predicted by the law of demand.
2. proves that the law of demand is an unreliable model for essential goods like gasoline during economic downturns.
3. is better explained by the law of supply, which would predict a decrease in production due to the recession.
4. does not invalidate the law of demand because a key condition, stable consumer income, has been violated. (correct answer)

Question 10

1. The demand for wheat has clearly increased, signaling to the landowner to produce more of it to meet market needs.
2. The law of diminishing returns suggests the farmer can now produce more wheat on the same land.
3. The opportunity cost of growing barley, in terms of foregone wheat profits, has increased. (correct answer)
4. The fixed costs of producing wheat have effectively decreased relative to the higher market price.

Question 11

1. The law of demand dictates that because the current price has not yet changed, the current quantity demanded will remain stable.
2. Current quantity demanded will increase as the announcement generates excitement and renewed interest in the product.
3. Current quantity demanded will likely decrease as consumers postpone their purchases in anticipation of the lower future price. (correct answer)
4. The quantity supplied will decrease as the company holds back inventory, causing the quantity demanded to fall due to scarcity.

Question 12

1. A market with a government-imposed price ceiling that dictates the maximum legal price for a good.
2. A monopoly market where a single firm acts as a "price maker" and has complete control over the quantity supplied.
3. Competitive markets where many firms are "price takers" and individually respond to a market price they cannot influence. (correct answer)
4. A traditional barter economy where goods are traded directly for other goods without a standardized monetary price.

Question 13

1. The quantity supplied of both electric and standard bicycles will increase to capitalize on general market growth for two-wheeled transport.
2. The company will not change its production mix because the marginal cost of producing each type of bicycle has not changed.
3. The overall supply of all bicycles, both electric and standard, will increase because the factory will become more profitable.
4. The quantity supplied of electric bicycles will increase as the company reallocates resources away from standard bicycle production. (correct answer)

Question 14

1. Restaurants have faced rising food and labor costs, which represents a leftward shift in the supply curve and forces them to increase prices.
2. Rising household incomes and a growing cultural preference for dining out have shifted the entire demand curve for restaurant meals to the right. (correct answer)
3. The restaurant industry is an exception where higher prices signal higher quality, thus causing an upward-sloping demand curve for meals.
4. The observation is simply a real-world example of the law of supply, where higher prices are necessary to bring forth a higher quantity.

Question 15

1. The student is correct; the solar panel market is a well-known modern exception to the traditional law of supply due to government subsidies.
2. The student is failing to consider the law of demand, where lower prices naturally lead to higher sales, which overrides the effects of the law of supply.
3. The student is observing a series of rightward shifts in the supply curve due to technological progress, not a movement along a single supply curve. (correct answer)
4. The student is observing producers who are willing to accept lower prices because their primary goal is gaining market share, not short-term profit.

Question 16

1. The lower price increased the quantity demanded, assuming other factors like consumer preferences and income remained constant. (correct answer)
2. The demand for the smartphone increased because the price was lower, encouraging more consumers to enter the market.
3. Consumer income must have increased over the six months, which allowed more people to afford the phone at its new price.
4. The manufacturer increased production of the phone, which naturally led to an increase in the number of phones sold.

Question 17

1. The law of supply predicts the higher price will cause the quantity supplied to increase as farmers harvest their remaining undamaged oranges more rapidly.
2. The law of supply is of limited use here; the quantity is reduced by a non-price determinant (a natural disaster) that caused a major leftward shift of the supply curve. (correct answer)
3. The law of supply shows that the quantity supplied will decrease to match the expected decrease in quantity demanded that will result from the higher price.
4. The law of supply predicts that growers in other regions, like California, will immediately increase their shipments to the national market.

Question 18

1. The law of supply applies to the market as a whole; the higher price attracts new, possibly less efficient, artisans into the market. (correct answer)
2. The individual artisan is behaving irrationally and violating the law of supply by not increasing their output in response to the higher price.
3. The increase in market quantity supplied must be caused by a surge in consumer demand, which forces more production to occur.
4. In the long run, the individual artisan will invest in new tools, allowing them to produce more and thus satisfy the law of supply.

Question 19

1. The potential profit from selling each bushel of wheat has increased, creating a stronger incentive.
2. Consumer demand for wheat has increased, and farmers feel an obligation to meet this societal need. (correct answer)
3. The higher price can now cover the higher marginal costs associated with producing additional bushels of wheat.
4. Growing wheat has become more profitable relative to other crops the farmer could grow, such as corn or soy.

Question 20

1. A popular celebrity endorses a brand of sneakers, and the sales of that brand increase significantly.
2. A coffee shop lowers the price of a latte by $1, and the number of lattes it sells per day increases. (correct answer)
3. A household receives a large tax refund and increases its spending on a wide variety of goods and services.
4. The price of gasoline rises, so commuters begin to purchase more fuel-efficient hybrid cars.