Economics Introduction Quiz Questions!

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Economics Introduction Quiz Questions! - Quiz

The study of economics is an important one, which looks at how we produce, distribute and consume goods and services for a variety of reasons. A lot of the world we live in relies on trade, whether it’s from country to country or taking place internally, and all of that information needs to be tracked to ensure it is being done in a way that is beneficial to everybody. Let’s start your studies on the topic off with this quiz!


Questions and Answers
  • 1. 

    Economics is an exact science.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Economics is not considered an exact science because it deals with human behavior, which is inherently complex and unpredictable. Unlike natural sciences such as physics or chemistry, economic theories cannot be tested in controlled laboratory conditions and often involve subjective interpretations. Economic models are based on assumptions and simplifications, making them prone to errors and uncertainties. Additionally, economic outcomes are influenced by various external factors such as politics, culture, and social dynamics, further complicating the predictability and precision of the science. Therefore, economics is considered a social science rather than an exact science.

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  • 2. 

    According to the Law of Demand, "As price of the good or service increases demand for that product..."

    • A.

      Decreases

    • B.

      Increases

    • C.

      Remains the same

    Correct Answer
    A. Decreases
    Explanation
    The Law of Demand states that as the price of a good or service increases, the demand for that product decreases. This is because as the price goes up, consumers are less willing or able to purchase the product, resulting in a decrease in demand. Conversely, if the price decreases, consumers are more likely to purchase the product, leading to an increase in demand. Therefore, the correct answer is "decreases."

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  • 3. 

    Peanut butter and jelly are two goods that are examples for:

    • A.

      Substitutes

    • B.

      Complements

    • C.

      Inferior goods

    Correct Answer
    B. Complements
    Explanation
    Peanut butter and jelly are considered complements because they are often consumed together. They enhance each other's taste and are commonly used as ingredients in sandwiches. When someone buys peanut butter, they are likely to also buy jelly to go with it. The demand for one product is directly related to the demand for the other, making them complements.

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  • 4. 

    As the price of a good decreases the demand for its substitute:

    • A.

      Decreases

    • B.

      Increases

    • C.

      Remains the same

    Correct Answer
    A. Decreases
    Explanation
    When the price of a good decreases, it becomes more affordable and attractive to consumers. As a result, they are more likely to choose the good over its substitute, leading to a decrease in the demand for the substitute. This is because consumers perceive the good as a better option in terms of value for money. Therefore, the correct answer is that the demand for the substitute decreases when the price of a good decreases.

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  • 5. 

    An increase in the price of pizza will do what to the demand curve for hamburgers?

    • A.

      The demand curve for hamburgers will shift to the left

    • B.

      The demand curve for hamburgers will shift to the right

    • C.

      The demand curve for hamburgers will remain the same

    Correct Answer
    B. The demand curve for hamburgers will shift to the right
    Explanation
    An increase in the price of pizza will lead to a higher demand for hamburgers. This is because pizza and hamburgers are substitute goods, meaning that they can be used in place of each other. When the price of pizza increases, consumers will be more likely to choose hamburgers as a substitute, increasing the demand for hamburgers. As a result, the demand curve for hamburgers will shift to the right.

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  • 6. 

    An example of substitutes are:

    • A.

      Peanut butter and jelly

    • B.

      Tires and cars

    • C.

      Pizza and tacos

    Correct Answer
    C. Pizza and tacos
    Explanation
    The given answer, pizza and tacos, is an example of substitutes because both are popular food options that can fulfill a similar craving or desire for a savory, handheld meal. While they may have different flavors and ingredients, they both offer a similar experience of convenience and satisfaction. This makes them interchangeable options for someone who is looking for a quick and tasty meal.

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  • 7. 

    The visual display of a demand schedule on a graph is called:

    • A.

      Demand curve

    • B.

      Supply curve

    • C.

      Law of demand

    • D.

      Law of supply

    Correct Answer
    A. Demand curve
    Explanation
    The visual display of a demand schedule on a graph is called a demand curve. A demand curve represents the relationship between the quantity demanded of a good or service and its price. It shows the quantity of the good or service that consumers are willing and able to purchase at different price levels. The demand curve typically slopes downwards, indicating that as the price of a good or service increases, the quantity demanded decreases, and vice versa. The shape and position of the demand curve can provide insights into consumer behavior and market dynamics.

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  • 8. 

    The demand curve illustrates the relationship between:

    • A.

      Price and supply

    • B.

      Price and substitutes

    • C.

      Price and quantity demanded

    • D.

      Price and income

    Correct Answer
    C. Price and quantity demanded
    Explanation
    The demand curve illustrates the relationship between price and quantity demanded. It shows how the quantity of a good or service demanded by consumers changes as the price of that good or service changes. As the price increases, the quantity demanded decreases, and vice versa. The demand curve slopes downward to represent this inverse relationship between price and quantity demanded.

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  • 9. 

    An increase in a person's income level will cause that persons demand for normal goods to:

    • A.

      Shift to the right

    • B.

      Shift to the left

    • C.

      Remain the same

    Correct Answer
    A. Shift to the right
    Explanation
    An increase in a person's income level will cause that person's demand for normal goods to shift to the right. This is because as income increases, individuals have more purchasing power and can afford to buy more of the normal goods they desire. As a result, the demand curve for these goods will shift to the right, indicating a higher quantity demanded at each price level.

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  • 10. 

    The law of supply states, "As the price of good increases the supply of that good..."

    • A.

      Increases

    • B.

      Decreases

    • C.

      Remains the same

    Correct Answer
    A. Increases
    Explanation
    The law of supply states that as the price of a good increases, the supply of that good also increases. This means that producers are willing to supply more of the good at higher prices, as it becomes more profitable for them to do so. The higher price incentivizes producers to allocate more resources and invest in the production of the good, leading to an increase in its supply in the market.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jul 22, 2010
    Quiz Created by
    Tecumsah_sherman
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