Why might a rise in price of electric razors result in increased demand for nonelectric razors?

people decide to shift to non-electric razors to save money

goods that consumers demand more of when incomes increase

Automobile workers go on strike, supply of cars decreases and shifts the supply curve left, and

eventual upward movement along the demand curve

What level of output should a firm produce?

marginal revenue equals marginal cost

All of the following are disadvantages of rent control EXCEPT...

gives landlords an incentive to attract renters

A firm with a natural monopoly

agrees to allow the government to control the price

What is most likely to occur when the price of a good with elastic demand is raised by 10 %?

quantity sold will decrease by 15 percent

What happens to the supply of cars when the price of steel goes up?

decreases because the good becomes more expensive to produce

Why would the supply curve of a dog walking business be considered elastic?

it can hire workers quickly if the price rises

A farmer might store his soybeans instead of selling right after harvest because...

Inflation is running at 25 percent

What does a market demand curve predict?

quantity people will buy when the price rises or falls

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Supply & Demand

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Questions 25

Answers

1
A raise in the price of a product...
increases competition
causes a decrease in supply
decreases competition
causes firms to decrease production
2
In many industries, deregulation has resulted in
safer products
increased government control
lower prices for consumers
antitrust laws
3
Why might a rise in price of electric razors result in increased demand for nonelectric razors?
non-electric razors are more plentiful than electric razors
people decide to shift to non-electric razors to save money
non-electric razors work better
electric razors = normal and non-electric razors = inferior
4
Normal goods are...
goods that consumers demand more of when incomes increase
two goods that are bought and used together
goods that consumers demand less of when incomes increase
goods used in place of one another
5
Which of the following businesses has the most elastic supply?
hair cutting
newspaper publishing
apple farming
electricity production
6
Automobile workers go on strike, supply of cars decreases and shifts the supply curve left, and
eventual downward movement along the demand curve
demand curve would eventually shift to the right
eventual upward movement along the demand curve
demand curve would eventually shift to the left
7
What level of output should a firm produce?
marginal revenue equals marginal cost
marginal revenue is greater than marginal cost
fixed cost and marginal cost are equal
variable cost and marginal cost rise at the same rate
8
Which of the following is NOT a factor in determining the elasticity of demand for a good?
importance of the good to the consumer
how many substitute goods are available
increase in population
consumer's perception of the good as necessity or luxury
9
All of the following are disadvantages of rent control EXCEPT...
might encourage discrimination by landlords and bribery
results in lower quality apartment buildings
leaves many customers without housing
gives landlords an incentive to attract renters
10
Equilibrium wage for low-skilled labor is $4.50/hr, but minimum wage is set at $5.15/hr...
a market in equilibrium
an excess supply of labor
employers ready to hire more workers
an excess demand for labor
11
Which of the following will always cause a supply curve to shift to the left?
excise taxes
advances in technology
fewer inputs
future expectations of falling prices
12
A system of allocating scarce goods and services using criteria other than price is...
a black market
rationing
a supply shock
spillover costs
13
When the actual price in a market is below the equilibrium price, you have...
a price floor
equilibrium
excess supply
a price ceiling
14
A firm with a natural monopoly
offers may different goods and services
is an example of perfect competition
is usually very inefficient
agrees to allow the government to control the price
15
additional income from selling one more unit of a good, sometimes equal to price, is...
marginal revenue
increasing marginal returns.
marginal cost
marginal product of labor
16
What is most likely to occur when the price of a good with elastic demand is raised by 10 %?
quantity sold will increase by 10 percent
quantity sold will decrease by 15 percent
quantity sold will decrease by 10 percent
quantity sold will decrease by 5 percent
17
What happens to the supply of cars when the price of steel goes up?
decreases because the good becomes more expensive to produce
decreases because consumers find a substitute product
increases because the good becomes more expensive to produce
increases because the good becomes cheaper to produce
18
If firms agree to set the price below costs to drive competitors out of business they are using
economies of scale
differentiation
price discrimination
predatory pricing
19
An exception to the general idea that markets lead to an efficient allocation of resources is
imperfect competition
perfect competition
unfair competition
black market
20
An example of a barrier to entry is
government deregulation
high start-up costs
low start-up costs
perfect competition
21
Public water is an example of a(n)
natural monopoly
oligopoly
trust
cartel
22
Price discrimination may be found in any market structure except for
perfect competition
a natural monopoly
an oligopoly
a cartel
23
Why would the supply curve of a dog walking business be considered elastic?
the supply of dogs changes quickly
it can hire workers quickly if the price rises
all of the above
the supply of dog walking isn't easily expanded or reduced
24
A farmer might store his soybeans instead of selling right after harvest because...
Inflation is running at 25 percent
new technology decreases the chance of rot
government lifts restrictions on the imports of soy beans
government imposes an excise tax effective next year
25
What does a market demand curve predict?
how much sellers can lower prices and still earn profit
what sellers will do to increase demand for a good
what the future price of a good will be
quantity people will buy when the price rises or falls

Supply & Demand Flashcards | StudBud