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2020 Unit 2 Review Econ Flashcards | StudBud
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2020 Unit 2 Review Econ
2020 Unit 2 Review Econ
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1
Price of orange juice doubles--Fili drinks apple juice instead. Why is his demand elastic?
Change over time
it's a necessity
availability of substitutes
it takes too long to make cranberry juice
2
Minimum wage is an example of
the action of market forces
Price floor
Price ceiling
market equilibrium
3
Gov puts an excise tax on cigarettes...What happens to supply of cigarettes?
no change
moves up the supply curve
shift to the left
shift to the right
4
A shoe store has a sale. More people buy shoes at the sale then on a usual day...Example of?
inelasticity of demand
total revenue
the substitution effect
the law of demand
5
How does elasticity affect a company's pricing & total revenues when demand is inelastic?
price increase will decrease revenues
price increase will increase revenues
price will not affect revenues
price decrease will increase revenue
6
the demand curve (line) slopes from ....
top left to bottom right
bottom left to top right
7
What is an example of a price floor?
Minimum wage
Rent control
Cap on gas prices
8
Quickest and easiest way to solve a surplus?
raise the production
raise the price
lower the price
lower the production
9
This has the greatest influence on the elasticity of supply:
Time
Profit
Labor
10
Factor affecting demand that causes a shift
price
income of consumers
11
How does better technology generally affect production?
increases cost and decreases supply
has little effect on supply at all
lower cost & decreases supply
lowers cost and increases supply
12
When the price is set at $4 how many extra slices of pizza will there be?
About 60
About 30
About 50
About 40
13
When is the market at equilibrium
when demand equals supply
when prices equal the the cost of production
when unsold goods begin to pile up
when supplier begin to reduce prices
14
Car companies take two years to respond to a rise in fuel prices. Supply of cars is...
elastic
inferior
inelastic
static
15
Prices lead to an efficient use of resources, in other words...
We can buy what we want at the price we make
the government decides who gets what
resource owner are unable to bargain to sell their stuff
resources are used in the most valuable and productive way
16
Which of the following indicate
movement along
the supply curve for batteries?
AAA batteries go up in price from $3.50 to $3.95
workers at a battery factory go on strike
new trade agreement allows importing foreign batteries
law requiring green batteries
17
The substitution effect and income effect describe?
how income changes when someone changes jobs
factors that influence consumer buying choices
choices producers make to improve goods
market changes that affect production of goods
18
If the price of shoes is set
below
the equilibrium price what will happen?
inelastic demand
equilibrium
shortage
surplus
19
Price floors typically cause?
Excess supply
Excess demand
Equalibrium
Shortages
20
All of the following are advantages of a price system
except...
Prices are easily set by the government
prices act as signals to buyers and sellers
prices are flexible
Prices act as incentives for buyers and sellers
21
If a seller expects the price of a good to rise in the future, the seller will
change jobs
store the goods until the price goes up
increase the price of the good now
place the goods in the market now
22
Most goods are normal goods. This means that demand
increases when income rise.
stays the same
I don't know
decreases when incomes rise
23
Which headline fits the following graph for iPhones?
Price of Android Goes Up 10%
Computer Chips Cost Pennies to Produce
Great Recession Hits America
Government Awards Apple, Inc. Huge Subsidy
24
Which of the following factors make up the concept of demand
both desire for the good and ability to pay
desire for a good
none of these
ability to pay
25
The price of computers rises. According to the Law of Supply - What will manufacturers do?
decrease computer production
stop computer production
maintain current number of computers
increase computer production
26
Quantity demanded
refers to...
shifting the demand curve to the left
The amount demanded at a given price
the amount supplied at a given price
shifting the demand curve to the right
27
How can expectations of the future change
consumer
behavior?
demand drops if there are no substitutes
demand rises if there will be plenty of the good
demand drops if price stays the same
demand rises now if the price is going up in the future
28
Assume there is a price ceiling at $300. Which of the following is
NOT
true?
Prices cannot rise above $300
Creates surplus of 4000
Creates shortage of 4000
PC is set below equilibrium
29
What do the points on a demand curve represent?
change in elasticity
change in total demand
change in marginal utility
change in quantity demanded
30
How are goods distributed in a free market economy?
through rationing
through prices
through disequilibrium
through government action
31
What does elasticity of demand measure?
an increase in the availability of quantity
how much buyers respond to a change in price
a decrease in quantity demanded
the time consumers take to change habits
32
Who determines supply?
Sellers
Buyers
33
If a good is a necessity like insulin, what is its elasticity of demand?
inelastic
perfect elasticity
not affected
elastic
34
Lisa's rent goes up, but her income stays the same...What will she buy more of?
normal goods
luxuries
inferior goods
complements
35
a shift in demand to the left will result in a...........
higher equilibrium price
lower equilibrium price
36
Price of orange juice doubles--John drinks apple juice instead. His demand is...?
elastic for cranberry juice
elastic for apple juice
inelastic for cranberry juice
inelastic for apple juice
37
Price ceilings are typically set...
at equilibrium
higher than equilibrium
lower than equilibrium
no such thing as a price ceiling
38
Which of the following will occur if the price of butter goes up?
the demand for margarine increases
the demand for margarine moves to the left
demand for butter increases
demand curve for butter moves to the right
39
In a free market who sets the prices of goods and services?
buyers
sellers
buyers and sellers
government
40
Which of the following is a normal consequence of Price Ceilings?
The item becomes less popular as price drops
the substitutes also drop in price
Black markets develop due to excess demand
Prices fall in order to get rid of surplus
41
Which good has the
highest
elasticity of demand?
insulin
heart medication
bicycles
Cigarettes
42
Producers will offer more of a good if price increases and less as its price falls.
Elasticity of Demand
Law of Supply
Elasticity of Supply
Law of Demand
43
What is a price ceiling?
The minimum price for a product or service
A maximum price for a product or service
The ceiling of a Price Mart
A ceiling made of money
44
Which product has an inelastic demand?
Chanel Shoes
Gucci Bag
Chipotle
Toilet paper
45
another word for excess demand
surplus
shortage
46
When will increased demand for one good increase the demand for another?
when the goods are inelasctic
when the goods are inferior
when the goods are subtitutes
when the goods are complements
47
A subsidy is...
a form of price ceiling
a gov't payment to support a business or market
illustrated by the market supply curve
a tax on the production of a good
48
A singer sets off a fad for wearing polka dot clothing. What factor is affecting demand?
substitutes
consumer taste/preferences
consumer expectations
complements
49
factors affecting supply
incomes, substitutes
production costs, new technology
50
The demand curve shifts to the right & the supply curve does not move. Which is true?
demand decreases and price increases
demand decreases and price decreases
demand increases and price increases
demand Increases but price stays the same
