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Economics Topic 3 Review Flashcards | StudBud
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Economics Topic 3 Review
Economics Topic 3 Review
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1
How would a new excise tax affect a supply curve?
None of the above
It would likely shift to the right.
It would likely shift to the left.
It would not shift in either direction.
2
A market structure in which a large number of firms all produce the same product is
oligopoly
monopoly
imperfect competition
perfect competition
3
What is the effect of import restrictions on prices?
They cause prices to rise.
They often cause prices to rise steeply and then drop.
They usually do not have any lasting effect on price.
They cause prices to drop.
4
A graphic representation of a supply schedule is a
Production Possibilities Curve
Demand Curve
Lorenz Curve
Supply Curve
5
If demand and/or supply increase the curve will shift to the right and shift to the left if there is a decrease.
True
False
6
A situation in which quantity supplied is greater than quantity demanded is called
Equilibrium
Surplus
Shortage
Surfeit
7
Which of the following could cause the demand curve for cars in your city to shift to the left?
a rise in the average wages
a layoff of 500 workers at the city’s airport
hundreds of new people moving into your city
a sale at the local dealership that ends next week
8
What kind of market runs most efficiently when one large firm supplies all of the output?
natural monopoly
government monopoly
imperfect competition
perfect competition
9
If a pizzeria owner purchases equipment enabling production of 30% more pizza then
the supply curve will shift left and then right
the supply curve will shift right and then left
the supply curve will shift left
the supply curve will shift right
10
Which of the following is NOT a benefit of the price system?
Prices are responsive and flexible
Prices provide incentives
It constricts how consumers respond to price changes
The price system is free to administer.
11
Which is a good consumers demand more of when their incomes increase?
Complement
Normal good
Substitute
Inferior Good
12
A measure of how consumers react to a change in price is called
Elasticity of supply
Elasticity of demand
Efficacy of price
Essentialness
13
A shift in the demand curve means which of the following?
a change in consumer income
a rise in prices
a change in demand at every price
a decrease in both price and quantity demanded
14
A graphic representation of a demand schedule is a
Supply Curve
Demand Curve
Production Possibilities Curve
Lorenz Curve
15
Factors that make it difficult for new firms to enter a market are
Game Theory
Input costs
Barriers To Entry
Economies of scale
16
Which of the following is an example of a good with inelastic supply?
beanbags
apples
toothbrushes
hats
17
Which of the following is a fixed cost for a store?
inventory
rent
advertising
short-term workers
18
A government payment that supports a business or market is called a(n)
Subsidy
Intervention
Expectation
Excise tax
19
Firms attempting to set prices below market for the short term to drive competitors out of business is known as
Deregulatory pricing
Predatory pricing
Monopoly pricing
Substitution pricing
20
Minimum wage is an example of a
Rationing
None of the above
Price ceiling
Price floor
21
The cost of producing one more unit of a good is called
Marginal Benefit
Negative Marginal Return
Marginal Product of Labor
Marginal Cost
22
A cost which does not change, no matter how much of a good is produced is a
variable cost
fixed cost
direct cost
marginal cost
23
Rationing can lead directly to a black market.
False
True
24
A cost that changes depending on how much is produced is a
variable cost
indirect cost
fixed cost
marginal cost
25
A market dominated by a single seller is a/an
Franchise
Monopolistic competition
Monopoly
Oligopoly
26
The amount of a good or service that is available is called
Inventory
GDP
Demand
Supply
27
Laws that encourage competition in the marketplace are
Business laws
Antitrust laws
Licensing laws
Deregulation laws
28
Which of the following is NOT a condition for perfect competition?
Many buyers and sellers participate in the market.
Sellers offer a wide variety of products.
Sellers are able to enter and exit the market easily.
Buyers and sellers are well informed about products.
29
Rent control is an example of a
None of the above
Price floor
Supply shock
Price ceiling
30
The effort of
each
supplier to meet the demand of as many consumers as possible is
predatory pricing
consumerism
elasticity
competition
31
A market dominated by a few large firms is a/an
Monopoly
Imperfect Competition
Oligopoly
Cooperative
32
Two goods that are bought and used together, such as pancakes and syrup, are examples of
Substitutes
Inferior Goods
Normal Goods
Complements
33
How much control over price do companies in a monopoly have?
some control
very little control
no control
total control
34
A system of allocating scarce goods and services using criteria other than price is called
Supply shock
Allocation
Price System
Rationing
35
The law of demand states that when a good’s price is lower
the quantity demanded is smaller
the quantity demanded is greater
There is no relationship between price and quantity demanded.
the quantity demanded is greater, but when prices are higher
36
Which of the following allows companies to receive patents and profit from their research without competition?
Corporate monopoly
Natural monopoly
Monopoly
Government monopoly
37
Which of the following would likely have inelastic demand?
Luxury vacation
Coffee
Electronic device
Prescription medication
38
Which of the following does NOT affect elasticity?
Change over time
Production costs
Relative importance
Availability of substitutes
39
How many workers should a firm hire?
It would depend on outside factors.
There is not enough information to answer the question.
The maximum amount of available workers
The number of employees which would make marginal product of labor highest
40
In the event of a negative supply shock, prices will
decrease, then increase
decrease
none of the above
increase
41
The point at which quantity supplied and quantity demanded are the same is called
Balance
Equipoise
Disequilibrium
Equilibrium
42
Many companies selling similar but not identical products is
perfect competition
oligopoly
monopolistic competition
government monopoly
43
The ability to control prices and total market output is
Market power
Differentiation
Deregulation
Collusion
44
What effects do trends have on suppliers?
Trends create decrease in demand but not profit, leading to more suppliers
Trends create a decrease in demand and profit, leading to less suppliers
Trends create increase in demand but not profit, leading to less suppliers
Trends create an increase in demand and profit, leading to more suppliers
45
A situation in which quantity demanded is greater than quantity supplied is called
Surplus
Deficiency
Disequilibrium
Shortage
46
The law of supply states that producers offer more of a good or service
as its price increases, but when producers offer less of a good or service
as its price decreases
There is no relationship between price and quantity supplied.
as its price increases
47
Which is a good that consumers demand less of when their incomes increase?
Complement
Normal Good
Substitute
Inferior Good
48
An elastic demand is a demand that is not very sensitive to a change in price.
False
True
49
A formal organization of producers that agree to team up to coordinate prices & production to gain market power is a/an
government monopoly
oligopoly
imperfect competition
cartel
50
Will has inelastic demand for sports drinks. The price increased from $1 to $1.50. What could describe his response?
He bought 15 bottles a month at $1.00 and 20 bottles a month at $1.50.
He bought 10 bottles a month at $1.00 and 5 bottles a month at $1.50.
He bought 10 bottles a month at $1.00 and 8 bottles a month at $1.50.
He bought 15 bottles a month at $1.00 and 5 bottles a month at $1.50.
51
Which of the following describes the substitution effect?
Prices for a good increase, making demand for a substitute good increase
None of the above
Prices for a good increase, making demand for a substitute good decrease
Price for a good decreases, making demand for a substitute good increase
52
A measure of the way quantity supplied (firms) reacts to a change in price is called
Elasticity of supply
Substitution effect
Elasticity of demand
None of the above
53
Joan makes 8 smoothies/hour. She hires Jake and they can make 18 smoothies/hour. What is the marginal product of labor?
26
10
2
9
54
The desire to own something
and
the ability to pay for it is
supply
competition
elasticity
demand
