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Demand And Supply test
This test consists of 10 questions designed
to test your understanding of demand and
supply theory
The links provide you with a choice of
answer, along with explanations and
solutions.
You will need a calculator to complete this
test.
Question 1.
The basic law of demand states?
a. The lower the price the higher the quantity
supplied
b. The lower the price the lower the quantity
demanded
c. The lower the price the higher the quantity
demanded
Correct.
Wrong Try again.
Wrong. Try again.
Question 2.
A successful promotion campaign designed to
increase brand loyalty is likely to :
A. Make price elasticity of supply more elastic
B. Make price elasticity of demand more
inelastic
C. Make price elasticity of demand more elastic
Wrong. Try Again
Wrong. Try again
Correct.
Question 3.
Which of the following is likely to increase
supply without an increase in price?
A. Mass marketing campaign
B. Technological advances
C. Higher real incomes of consumers
Wrong.
Correct.
Wrong Try Again.
Question 4.
Which of the following is an elastic level of
price elasticity of demand?
A. 0.56
B. 1.0
C. 2.4
Inelastic – try again.
Try again
Correct Above 1 elastic
Question 5.
Which of the following is likely to increase
demand levels?
A. A fall in the price of a substitute
B. A fall in the price of a compliment
Wrong.
Correct
Question 6.
A fall in price of a good with price elasticity of
demand of 2.2 will
A. Increase revenues
B. Leave revenues unchanged
C. Decrease revenues
Correct.
No, try again
No,
Try again
Question 7.
An increase in real incomes will
A. Lead to a less than proportional increase in
demand for basic goods.
B. Lead to a more than proportional increase in
demand for luxury goods
1. Both
2. A only
Wrong.
Correct.
Question 8.
Which of the following are types of product are
likely to have an inelastic Ped?
A. Petrol
B. Toilet Roll
C. Water
1. A and B
2. B and C
3. All of the above.
Sorry, try again
Correct.
Try again
Question 9.
A firm with products priced at 10p increases
price to 12p, Ped is 0.5. Quantity
demanded will change by?
A. An increase of 20%
B. A fall of 20%
C. A fall of 10%
Wrong, try again.
Sorry Try again
Correct
Question 10.
A firm increases price from 20p to 22p,
revenue falls from £40,000 to £32,000. Ped
is?
A. 0.1
B. 4
C. 2
Sorry wrong
No, try again
Correct. Well done.
You have now completed the test.