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Economics Unit 2 Flashcards | StudBud
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Economics Unit 2
Economics Unit 2
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#economics #supplyanddemand #demandcurves #graphs
Flashcards
35 cards
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Questions
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Answers
1
Which of the following has an inelastic demand?
a good that is a necessity
a good for which there are many close substitutes
a good for which the consumer pays the bill
a good that is a luxury
2
A leftward shift of supply will:
decrease equilibrium quantity.
increase equilibrium quantity.
decrease demand.
increase demand.
3
The total revenue a firm receives from selling its product minus the total cost of production
Cost
Profit
Net
Quantity supplied
4
Goods that are a luxury have ___________ of demand.
a long time horizon
elastic supply
inelastic demand
elastic demand
5
What is a subsidy?
a policy that raises revenue to pay for public goods
a government payment to support a particular good
a period of temporary storage
the methods used to create goods from inputs
6
"Ceteris paribus" means
all else equal
ignore the factor
equal demand
magic numbers
7
The price goes up, consumers buy less, and when the price goes down, they buy more. The Law of
supply
surplus
demand
substitution
8
What is the meaning of the term
ration?
to set a minimum price
to set fixed quantities of goods per person
to set levels of production
to set a maximum price
9
What will cause the equilibrium price to fall & the equilibrium quantity to either rise or fall
an increase in demand and a decrease in supply
a decrease in demand and an increase in supply
a decrease in demand and a decrease in supply
an increase in demand and an increase in supply
10
The law of supply is illustrated by a supply curve that is:
downward-sloping.
horizontal
vertical
upward-sloping
11
An excess demand for a product for a period of time is called a
a surplus
a shortage
an equilibrium
a price floor
12
Based on this graph, how have lemon prices changed?
They have dropped because consumer tastes have changed.
They have risen because supply has decreased.
They have risen because quantity demanded has increased.
They have dropped because supply has increased.
13
A leftward shift of demand and a leftward shift of supply will:
increase equilibrium quantity
decrease equilibrium price
decrease equilibrium quantity
increase equilibrium price
14
A graphical representation showing the quantity demanded at each price is:
a demand schedule
a law of demand
taste curve
a demand curve
15
Which move along the graph is the most likely?
C to D
D to E
B to C
A to B
16
When there is a great deal of supply of something that is in short demand, we would expect:
the price to rise
to price to be low
the price to be zero
the price to be high
17
An equilibrium price is achieved in a market when:
supply equals demand
price equals quantity
quantity supplied equals quantity demanded
price is zero
18
When an excess supply persists for a significant period of time, we call it:
a price ceiling
a shortage
an equilibrium
a surplus
19
The change in consumption that occurs when a price increase causes consumers to feel poorer
supply effect
substitution effect
income effect
demand effect
20
If the price of bottled water is $0.50 the quantity demanded by Holly is:
40
70
0
210
21
Which of the following events would decrease the supply of cheese pizza?
More firms decide to produce pizza.
The price of cheese rises.
The price of tomato sauce drops.
Government offers a subsidy for pizza dough
22
Which good is likely to be the most expensive?
one with high demand and high supply
one with high demand and low supply
one with low demand and low supply
one with low demand and high supply
23
A perfectly elastic demand curve looks like
horizontal
an upward slope
a downward slope
vertical
24
Which two key economic factors determine prices in a free market?
substitutes and complements
quantity and scarcity
tastes and expectations
supply and demand
25
Corn is an input in the production of beef. If the price of corn drops the supply of beef
would decrease because others would buy more corn.
would either rise or fall depending
would increase because production costs would decline.
would be unchanged because its own price has not changed.
26
The additional cost of doing something one more time is:
total cost
marginal cost
fixed cost
variable cost
27
When an increase in the price of a good causes a consumer to switch to another good is called
supply effect
income effect
demand effect
substitution effect
28
A leftward shift of demand and a rightward shift of supply will:
decrease equilibrium quantity
increase equilibrium price
increase equilibrium quantity
decrease equilibrium price
29
What would will cause the equilibrium price to fall & the equilibrium quantity to rise?
an increase in demand and no change in supply
a decrease in demand and an increase in supply
a decrease in demand and a decrease in supply
an increase in supply and no change in demand
30
What problem do suppliers face at point B on the graph?
They have more packs of gum than consumers will buy.
They cannot make enough total revenue to stay in business.
Can't supply consumers with enough gum for their needs
They have a larger inventory of gum than they can store.
31
The tendency for the price and quantity supplied to move in the same direction
Elasticity of Supply
Elasticity of Demand
Law of Supply
Law of Demand
32
A market for a product that is sold by scalpers, licensed brokers, or online auctions is called
a competitive market
an equilibrium market
a secondary market
a sticky price market
33
A period of time during which the quantities of all inputs are variable is:
the immediate run
the long run
the short run
the medium run
34
If an increase in the price of good A leads to a decrease in the demand for good B then they're
substitutes
compliments
expectations
inferior goods
35
A government-imposed limit on the highest price firms can charge in a market is
a price ceiling
a sticky price
a price floor
an equilibrium price
