A technological advancement

will shift the supply curve to the right

Which of the following would NOT shift the demand curve for a good or service?

a change in the price of the good or service

How is future price related to current demand?

If the price is expected to rise, current demand will rise.

If the number of buyers in the market decreases,

the demand in the market will decrease.

On which kinds of goods do governments generally place price ceilings?

essentials that are too expensive for some consumers

What does it mean when the demand for a product is inelastic?

Price increase does not have a big impact on buying habits.

What determines the price and the quantity produced of most goods?

the interaction of supply and demand

If the price of a substitute to good X increases, then

the demand for good X will increase.

When we move up or down a given demand curve,

all nonprice determinants of demand are assumed constant.

What will happen in the beef market if buyers are expecting higher prices in the near future?

The demand for beef will increase.

A higher price for batteries would tend to

increase the demand for electricity.

When the selling price of a good goes up, what is the relationship to the quantity supplied?

It becomes practical to produce more goods.

What is a company’s total revenue?

the amount a company receives for selling its goods

What is a basic principle of the law of demand?

When a good’s price is lower, people will buy more of it.

How did the existence of the baby boom generation change demand in the United States?

Demand was raised with each age the baby boomers reached.

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Unit 2 Econ Review

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Questions 27

Answers

1
A technological advancement
will shift the demand curve to the left
will shift the supply curve to the right
will shift the demand curve to the right
will shift the supply curve to the left
2
Which of the following would NOT shift the demand curve for a good or service?
a change in income
a change in the price of the good or service
a change in expectations about the price of good or services
a change in the price of a related good
3
A decrease in the price of X results in less of good Y sold. This would mean that X and Y are
substitute goods.
complementary goods.
unrelated goods.
normal goods.
4
When a buyer is able and willing to buy a good or service, they create which of the following?
consumption
elasticity
demand
allocation
5
The price ceiling that was used to control the price of housing in New York City was called?
rent abatement
housing control
equilibrium price
rent control
6
How is future price related to current demand?
If the price is expected to fall, current demand will rise.
If the price is expected to rise, current demand will drop.
If the price is expected to rise, current demand will rise.
Future price is not related to current demand.
7
If the number of buyers in the market decreases,
the demand in the market will increase.
the demand in the market will decrease.
the supply in the market will decrease.
the supply in the market will increase.
8
When prices rise, which of the following happens to income?
It rises to meet prices.
It goes down.
It is used to buy different things.
It buys less.
9
On which kinds of goods do governments generally place price ceilings?
those that are essential and cheap
those that are not necessary but have become customary
essentials that are too expensive for some consumers
Cheap items but could become more expensive w/o the ceiling
10
What does it mean when the demand for a product is inelastic?
There are very few satisfactory substitutes for the product.
People will not buy the product when the price goes up.
Customers are sensitive to the price of the product.
Price increase does not have a big impact on buying habits.
11
If a good is a necessity, demand for the good would tend to be
horizontal
unit elastic
elastic
inelastic
12
What determines the price and the quantity produced of most goods?
the consumer’s perception of necessity
the quality of the goods that are produced
the availability of substitutes for the goods
the interaction of supply and demand
13
What is the name of the smallest amount that can be paid to most workers for an hour of work?
price floor
minimum wage
supply cost
equilibrium price
14
If the price of a substitute to good X increases, then
the market price of good X will decrease.
the demand for good X will increase.
the demand for good X will decrease.
the demand for good X will not change.
15
If a good is a luxury, demand for the good would tend to be
elastic
horizontal
unit elastic
inelastic.
16
Which good would likely be bought in the same quantity even if it doubled in price?
shoes
computers
telephones
pencils
17
The side of the market that deals with the willingness and ability to produce and sell is
supply
demand
competition
a monopoly
18
When we move up or down a given demand curve,
only price is held constant.
income and the price of the good are held constant.
all nonprice determinants of demand are assumed constant.
all determinants of quantity demanded are held constant.
19
What will happen in the beef market if buyers are expecting higher prices in the near future?
The supply of beef will increase.
The demand for beef will decrease.
The demand for beef will be unaffected.
The demand for beef will increase.
20
A higher price for batteries would tend to
increase the demand for flashlights.
increase the demand for electricity.
decrease the demand for electricity.
increase the demand for batteries.
21
When the selling price of a good goes up, what is the relationship to the quantity supplied?
The profit made on each item goes down.
It becomes practical to produce more goods.
There is no relationship between the two.
The cost of production goes down.
22
Which of the following is a good that might not be bought when prices rise?
substitute
inferior good
luxury
complement
23
What is a company’s total revenue?
the price of a company’s goods
the amount a company receives for selling its goods
the amount of goods a company can expect to sell
the amount of profit a company can expect to make
24
What is a basic principle of the law of demand?
The higher the price, the more people will want the good.
Everyone has a limited income that they will spend.
When a good’s price is lower, people will buy more of it.
Services are of interest in the same way that goods are.
25
The relationship between price and quantity supplied is
Same as the relationship between price and quantity demanded
negative, or inverse
positive, or direct
nonexistent
26
How did the existence of the baby boom generation change demand in the United States?
Baby boomers did not raise demand until they became adults
People were poorer because of kids, so demand was lowered.
Demand was raised with each age the baby boomers reached.
When they became teenagers, no longer affected demand.
27
Which of the following is an example of a good with an inelastic supply?
beanbags
hats
apples
gloves

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