Supply, Demand & Equilibrium Unit Two Test Review Game for Frischman Economics

Question 1

What happens to a firm in a perfectly competitive market that raises its price(s)?

Accepted Answer

Consumers will substitute a competitor's product.

Question 2

What happens when a perfectly competitive firm charges an excessive price for its product?

Accepted Answer

Consumers will substitute a competitor's product.

Question 3

The change in output from adding one more worker is known as:

Accepted Answer

marginal product of labor

Question 4

Those that argue AGAINST raising the minimum wage do so because they say it will lead to increased_______________.

Accepted Answer

unemployment

Question 5

When elasticity is exactly 1, supply is:

Accepted Answer

unit elastic

Question 6

According to economists, what type of demand does insulin for a diabetic have?

Accepted Answer

inelastic demand

Question 7

Marginal cost is:

Accepted Answer

The cost of producing one more unit of a good.

Question 8

Which of the following is NOT an example of complimentary goods?

Accepted Answer

calculator and cellphone

Question 9

A market is in equilibrium when Qd and Qs meet at the same_________?

Accepted Answer

Price

Question 10

A measure of how consumers react to a change in price is known as the:

Accepted Answer

elasticity of demand

Question 11

The time and money it takes driving around to different stores to locate a product is known as:

Accepted Answer

search cost

Question 12

Laws that are designed to prevent monopolies from forming are known as:

Accepted Answer

anti-trust laws

Question 13

Which is the BEST example of a variable cost for a business?

Accepted Answer

raw materials

Question 14

Which of the following determines the price & quantity of most goods in a market-based system?

Accepted Answer

The interaction of supply and demand.

Question 15

Which of the following describes the substitution effect?

Accepted Answer

As price rises, consumers substitute other products.

Question 16

What econ. cond. existed when it was hard for hospitals to get masks and ventilators during the Covid-19 pandemic?

Accepted Answer

supply shock

Question 17

What is the govt doing when it intervenes in a market to affect price or quality of a good?

Accepted Answer

regulating

Question 18

When a demand curve SHIFTS, what does it mean?

Accepted Answer

There has been a change in demand at every price.

Question 19

When the govt gives lettuce farmers $.05 for every head of lettuce they grow they are giving a:

Accepted Answer

subsidy

Question 20

The price of amusement park tickets rise from $25 to $35. Which is the most likely effect?

Accepted Answer

The quantity demanded of tickets will go down.

Question 21

Total revenue is:

Accepted Answer

The money a business receives by selling it's goods

Question 22

The minimum price a producer can sell a good for that is set by the government is called?

Accepted Answer

price floor

Question 23

When does a surplus exist?

Accepted Answer

When there is more supply than people want/are able to buy.

Question 24

According to this, the higher the price of a product, the greater the quantity produced.

Accepted Answer

Law of Supply

Question 25

Which of the following is an example of an inferior good?

Accepted Answer

a used car

Question 26

Which of the following DOES NOT cause a shift in the demand curve?

Accepted Answer

A change in the cost of raw materials.

Question 27

If your quantity demanded of a product remains the same when price increases, your demand is:

Accepted Answer

inelastic

Question 28

When the govt STOPS deciding how much a company can charge it's customers, it is:

Accepted Answer

Deregulating

Question 29

A govt payment to support a business or industry is known as a what?

Accepted Answer

subsidy

Question 30

Whenever a market is in disequilibrium and prices are flexible, market forces will:

Accepted Answer

push the market toward equilibrium.

Question 31

According to this, the lower the price, the more consumers will buy of a product.

Accepted Answer

Law of Demand

Question 32

The minimum wage is an example of:

Accepted Answer

a price floor

Question 33

What happens when there is a surplus (excess supply) of a good in a market?

Accepted Answer

Prices tend to fall.

Question 34

U.S. laws forbid the development of which type of market structure to encourage competition in the marketplace?

Accepted Answer

monopolies

Question 35

Which of the following would lead to an increase in supply?

Accepted Answer

The cost of raw materials going down.

Question 36

Which of the following is NOT likely to be a fixed cost for a business?

Accepted Answer

an electric bill

Question 37

For most goods, a rise in consumer's income means that there will be a(n):

Accepted Answer

increase in demand

Supply, Demand & Equilibrium Unit Two Test Review Game for Frischman Economics

Questions 37

Supply, Demand & Equilibrium Unit Two Test Review Game for Frischman Economics

Questions 37