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TFN Chapter 4-5-6 Supply and Demand Test Review Flashcards | StudBud
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TFN Chapter 4-5-6 Supply and Demand Test Review
TFN Chapter 4-5-6 Supply and Demand Test Review
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Answers
1
Level where marginal product goes up with a new investment.
Supply Curve
Increasing Returns
Diminishing Returns
Elasticity
2
Which of the following is
NOT
an example of complements.
Skis and ski boots
Electric shaver and charging cord
Row boat and oars
Cubs and White Sox
3
Fixed cost plus variable cost.
Total Revenue
Subsidy
Profit Max
Total Cost
4
When quantity demanded is more than the quantity supplied what economic situation has occurred?
Surplus
Equilibrium.
Shortage
Perfect
5
Which of the following is an example of a good with inelastic demand?
Television sets
Life saving medicine
Computers
Chewing Gum
6
A factor that can change.
Variable
Law of Supply
Marginal Cost
Marginal Revenue
7
Total revenue is defined as
P*Q
A = B*C
MR = MC
E = MC SQUARED
8
Price goes down, quantity demanded goes down.
FALSE
TRUE
9
Which of the following leads to an increase in supply
Diminishing marginal returns
A decrease in the cost of raw materials
A change in the law of supply
An increase in cost of raw materials
10
A good for which the demand falls when income rises.
Complement
Inferior Good
Income Effect
Substitute
11
A chart that lists how much of a good a supplier will offer at various prices.
Elasticity
Supply Curve
Increasing Returns
Supply Schedule
12
Price goes up quantity demanded goes down.
Complements
SPITE
Law of Demand
Substitutes
13
Which of the following is a fixed cost for a store?
Inventory
Advertising
Short-term workers
Rent
14
If you keep buying despite a price increase, your demand is
Normal
Elastic
Inelastic
Strong
15
A graphic representation of a demand schedule.
Substitutes
Law of Demand
Demand Curve
Complements
16
Which of the following is an example of a good with an inelastic supply?
Apples
Beanbags
Toothbrushes
Hats
17
If sellers expect the price of a good to rise in the future, they will
Raise their prices now
Set prices according to the law of demand
Put more goods on the market
Store goods now and sell more in the future
18
Which of the following is the best example of the law of supply?
A milling company builds a new factory to process flour.
A company buys a new dishwasher to make their work easier.
Sandwich shop increases supply when the price is increased.
19
What factor has the greatest influence on elasticity and inelasticity of supply?
Time
Labor
Finance
Profit
20
Substitutes are
Goods that are bought and used together
Goods which cause a shift in the demand curve
Goods that cannot be replaced
Goods used in place of one another
21
A subsidy is
Government payment
A tax
Form of regulation
22
Which of the following describes the substitution effect?
As the price falls, people will substitute other products.
As demand rises, people will substitute other products.
As the price rises, people will substitute other products.
As demand falls, people will substitute other products.
23
What is the effect of import restrictions on prices?
They cause prices to drop
They often cause prices to rise steeply then drop
They usually do not have a lasting effect on price
They cause prices to rise
24
The extra income from selling one more unit of a good.
Law of Supply
Variable
Marginal Revenue
Marginal Cost
25
P * Q=== Price times quantity
Substitution Effect
Total Revenue
Inelastic
Normal Good
26
The demand curve illustrates
The difference in price charged by different stores.
The difference in demand for different products.
The products which are in most demand
The quantities demanded at each price by consumers.
27
Price multiplied by quantity.
Total Cost
Profit Max
Subsidy
Total Revenue
28
The change in output from adding one more worker is the
Marginal product of labor
Diminishing marginal returns
Increasing marginal returns
Negative marginal returns
29
The law of demand says ...
The lower the price, the more consumers will buy.
The higher the price, the more consumers will buy.
The lower the price, the fewer consumers will buy.
The lower the price, the more consumers will substitute.
30
A good consumed instead of one that’s price has risen.
Income Effect
Substitute
Complement
Inferior Good
31
Which of the following businesses has elastic supply?
Newspaper publishing
Hair cutting
Apple farming
32
Consumers react to an increase in price by consuming less of that good and more of other goods.
Substitution Effect
Total Revenue
Cetaris Paribus
Inelastic
33
A measure of the way a quantity supplied reacts to a change in price.
Supply Curve
Diminishing Returns
Elasticity
Supply Schedule
34
A payment to the government on the production or sale of a good.
Profit Max
Excise Tax
Subsidy
Total Revenue
35
Level where total product increases at a
smaller
rate with new investment.
Elasticity
Diminishing Returns
Supply Schedule
Increasing Returns
36
Peanut Butter and Jelly.
Demand Curve
Substitutes
SPITE
Complements
37
Change in output from adding one additional worker.
Marginal Revenue
Law of Supply
Variable
Marginal Product of Labor
38
For most goods, a rise in people’s income means that there will be
A substitution effect
A rise in prices
A decrease in demand
An increase in demand.
39
A producer’s profits are maximized when
Marginal costs result in decreasing marginal returns
Marginal costs are equal to marginal revenue
Marginal cost are equal to fixed costs plus variable cost
40
Everything stays constant.
Cetaris Paribus
Total Revenue
Normal Good
Substitution Effect
41
A good that is bought and used along with another good.
Complement
Elasticity of Demand
Income Effect
Substitute
42
Demand that is very sensitive to a change in price.
Inferior Good
Substitute
Income Effect
Elasticity of Demand
43
Marginal Revenue = Marginal Cost
Profit Max
Total Revenue
Excise Tax
Subsidy
44
A drop in price will ...
Not affect the Law of demand.
Not affect the demand for goods.
Increase the demand for goods.
Decrease the demand for goods.
45
Which of the following is an example of a variable cost?
Rent
Insurance
Raw Materials
46
At what point does quantity demanded and quantity supplied become equal?
Equilibrium
Minimum
Ceiling
Maximum
47
A market supply curve shows
How the supply of goods is kept in balance.
The quantity supplied by producers at different prices.
How prices affect the cost of raw materials.
48
Factors that shift the demand curve.
Substitutes
Complements
SPITE
Demand Curve
49
Quantity supplied decreases as price decreases.
Marginal Revenue
Marginal Product of Labor
Variable
Law of Supply
50
Price goes up, quantity demanded goes down.
FALSE
TRUE
51
The cost of producing one more unit of a good.
Marginal Cost
Marginal Revenue
Variable
Law of Supply
52
Demand that is not very sensitive to a change in price.
Substitution Effect
Normal Good
Cetaris Paribus
Inelastic
53
A graph of the quantity supplied of a good by all suppliers at different prices.
Supply Curve
Diminishing Returns
Increasing Returns
Supply Schedule
54
Price goes down, quantity demanded goes up.
FALSE
TRUE
55
Price goes up, quantity demanded goes up.
FALSE
TRUE
56
Government payment that supports a business or market.
Profit Max
Subsidy
Excise Tax
Total Cost
57
A good that consumers will demand more of when their income increases.
Substitution Effect
Normal Good
Cetaris Paribus
Inelastic
58
According to the law of supply.
The higher the price the larger the quantity produced
If the price of a good rises some firms will produce less
The lower the price the larger the quantity consumed
59
Change in consumption resulting from a change of real income.
Complement
Income Effect
Inferior Good
Elasticity of Demand
60
Pepsi and Coke.
Law of Demand
Complements
SPITE
Substitutes
