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Economics: chapters 4, 5, 6 Flashcards | StudBud
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Economics: chapters 4, 5, 6
Economics: chapters 4, 5, 6
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1
Which of these tends to force the price of an item upward?
attainment of equilibrium quantity for that item
a surplus of the item
attainment of equilibrium price for that item
the shortage of an item
2
How does the quantity supplied and quantity demanded change at the new equilibrium price?
both quantity supplied and quantity demanded increase
both quantity supplied and quantity demanded decrease
quantity supplied decreases and quantity demanded increases
quantity supplied increases and quantity demanded decreases
3
When the price is just right, the market has reached equilibrium.
False
True
4
Which of these names the only thing that can cause a change in quantity demanded?
unit eleastic demand
a subsitution
a change in price
diminishing satisfaction
5
The supply of a product normally decreases if
the cost of input goes down.
the price of the product increases.
taxes on the product increase.
more producers enter the market.
6
Of the following, which situation would cause the supply curve to shift to the right?
drought reduces industry output by 25%
firms exit the wheat industry
the government reduces subsidies to wheat farmers
new fertilizers increases wheat crop yields
7
When marginal costs equal marginal revenue, a firm has reached
maximum marginal product
break-even point
maximum number of workers
profit-maximizing quantity of output
8
What system is used to allocate goods and services without prices?
shortage
surplus
production function
rationing
9
At a given price, a surplus occurs when
the quantity supplied is greater than quantity demanded.
the quantity supplied is less than the quantity demanded.
the quantity demanded is the same as the quantity supplied.
the quantity demanded is more than the quantity supplied
10
In a competitive market economy, prices are considered
neutral
favorable
dictated
uncompromised
11
Total cost is the sum of the
all variable costs.
fixed costs and overhead costs.
fixed and variable costs.
fixed and marginal costs.
12
What is supply?
willingness and ability of producers to sell a product at different prices.
the desire to own something and the ability to pay for it.
factors that cause the demand for a product to change.
a graph of the quantity supplied and the ability to pay for it.
13
What describes prices in a market economy?
a set of compromises between buyers and sellers
a signal for consumers to purchase less
a set of compromises between the government and citizens
a signal for producers to produce less
14
When a customer's need for a product is not urgent, demand tends to be
complementary
unit elastic
inelastic
elastic
15
Equilibrium quantity is reached when what occurs?
when there is no change in quantity supplied
when the price increases
when prices are elastic
when quantity supplied equals quantity demanded
16
Which of the following products would have elastic demand?
medical services
gasoline, in general
medicine
candy
17
The graph showing how a change in the amount of a single variable input affects total output is a
production function
equilibrium
demand curve
supply curve
18
What is a consumer's willingness to replace a costly item with a less costly item an example of?
complements
demand elasticity
the income effect
the substitution effect
19
Which of the follwoing choices could cause the shift shown in the graph below.
a decrease in the price of a complement
a decrease in income
an increase in population
an increase in the price of a substitute
20
If the price of gasoline increases, the demand for tires decreases, because gasoline and tires are
inferior goods
complementary goods
economic goods
substitute goods
21
Which term is associated with electricity and raw materials?
total cost
variable cost
fixed cost
marginal cost
22
What causes a price change most of the time?
change in demand
change in supply
change in supply and demand
producers decide to raise the price
23
What shows quantities offered at various prices by all producers in a market?
equilibrium
market demand curve
market supply curve
production function
24
What Stage of production shows an increase in total product, but decreasing marginal product?
Stage III
Stage IV
Stage II
Stage I
25
A shortage usually sends the price downward.
False
True
26
A price ceiling will always send the price downward.
True
False
27
When does a firm reach their break-even point?
when marginal costs equal marginal revenue
when average revenue equals total revenue.
when fixed costs equal total costs
when total costs equal total revenue
28
How will a new machine that reduces the cost of picking oranges affect the price and quantity of oranges?
price increases, quantity increases
Price increases, quantity decreases
price decreases, quantity increases
price of oranges decreases, quantity decreases
29
Which of these best describes rent control?
subsidy
equilibrium price
price ceiling
nonrecourse loan
30
Which of the following does the graph below illustrate?
an increase in quantity supplied
an increase in supply
a decrease in supply
a decrease in quantity supplied
31
What is demand?
consumers buy more when the price decreases & less when the price increases
willingness and ability of producers to sell a product at a different price
the desire and willingness to own something and the ability to pay for it
factors that cuase the supply of a product to change
32
The shift shown in this graph represents a change in what?
marginal utility
demand elasticity
demand
quantity demanded
33
Which of the following could cause the shift shown in the graph?
an increase in the price of a complement
an increase in population
a decrease in income
a decrease in the price of a substitute
34
Which of these two terms describes the cost incurred regardless of the firm's rate of production?
fixed costs and variable costs
variable costs and overhead
fixed costs and overhead costs
variable costs and total costs
35
What do price ceilings prevent?
surpluses
benefits to consumers
prices from reaching equilibrium
shortages
36
With a price floor at $60, what would be the quantity demanded and quantity supplied?
QS = 2 QD 20
none of the above
QS = 10 QD = 20
QS = 20 QD = 2
37
For most products and services, increased price results in
demand for fewer products.
demand for more products.
increased demand for complements.
a decrease in the price of a substitute
38
Which products are most likely to have inelastic demand?
gasoline in general, services of medical doctors
fresh vegetables, butter, gas from a particular gas station
gas from a particular gas station, gasoline in general, butter
fresh vegetables, gasoline in general, butter
39
What does a movement on a graph represent?
a change in demand
the inverse relationship between price and marginal utility
change in quantity demanded
diminishing marginal utility
40
According to the Law of Supply, which of these would happen to an item as the price rose?
producers would make less of it
producers would lower the price on similar items
producers would make more of it
producers would increase the price even more
41
All of the following can change the market supply curve EXCEPT
a change in the demand for the product
the number of sellers offering the product.
the cost of labor
the expectation that prices are about to increase
42
Price supports for farmers refers to a
shortage
price ceiling
surplus
price floor
43
When producers offer more products for sale at each and every price,
they accept subsidies.
the supply curve has shifted to the right.
the supply curve has shifted to the left.
the price per unit decreases.
44
When would the demand for butter decrease?
when the price of butter increases
when the price of butter decreases
when the price of margarine increases
when the price of margarine decreases
45
When employees are getting in each other's way, the firm is operating
as much as it possibl can.
in Stage II of production.
Stage I of production.
Stage III of production.
