An example of a price ceiling would be:

Maximum rent for an apartment in NYC

Diminishing marginal utility is best described as:

Additional consumption leads to less and less satisfation

What is the law of supply?

As price goes up, quantity supplied goes up and vice versa

How does the profit incentive affect supply?

It encourages suppliers to produce more at all prices

Which of the following is the law of demand?

As price goes up, quantity demanded goes down and vice vera

What does equilibrium price represent? 2 correct answers

A compromise between buyers and sellers at a fair price, Where supply and demand meet

Which of the the following is an example of the law of demand?

As the price of Jordans goes up, the quantity demanded down

How does a surplus affect price?

A surplus causes prices to fall

How does a shortage affect price?

A shortage causes price to go up

What is the driving force behind the law of supply? Why does the law of supply exist?

Because of the profit incentive

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Unit 2 EOY Review

19 termsStudBud Administration230 plays

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Questions 19

Answers

1
Which of the following are the only things that can cause a SHIFT of the entire demand curve?
The elasticity of demand
The inverse relationship between price and quantity demanded
The determinants of demand
A change in price
2
What is one of the negative consequences of price ceilings?
They cause a surplus
They cause a shift in demand
They cause a shift in supply
They cause a shortage
3
How can suppliers eliminate the shortage on the following graph?
Shift the demand
Shift the supply
Increase the price
Decrease the price
4
An example of a price ceiling would be:
Minimum wage
Maximum rent for an apartment in NYC
Setting a minimum price for rent
None of the above
5
What is one of the consequences of a price floor?
They cause a surplus
They shift supply
They shift demand
They cause a shortage
6
Diminishing marginal utility is best described as:
Increasing utility as prices go up
A good or service commonly sold together
A good or service that is related to another
Additional consumption leads to less and less satisfation
7
Which of the following is NOT a determinant of demand?
Change in technology
Change in population
Change in price of complimentary goods
Change in taste and preferences
8
When suppliers advertise to consumers they are trying to influence which determinant of demand
Price of compliments
Population
Taste and preferences
Consumer Income
9
What is the law of supply?
As price goes down, quantity demanded goes down
As price goes up, quantity supplied goes up and vice versa
As price goes up, quantity demanded goes up
As price goes down, quantity supplied goes up
10
How does the profit incentive affect supply?
It shifts the supply curve
It discourages suppliers to produce more at all prices
It encourages suppliers to produce more at all prices
It shifts the demand curve
11
Which of the following is the law of demand?
As price goes down, quantity demanded goes down, and vice v.
As price goes up, quantity supplied goes up and vice vera
As price goes up, quantity demanded goes down and vice vera
As price goes down, equilibrium shifts
12
What does equilibrium price represent? 2 correct answers
A compromise between buyers and sellers at a fair price
When a shift in demand becomes equal to supply
Where supply is greater than demand
Where supply and demand meet
13
Which of the the following is an example of the law of demand?
As the price of Jordans goes up, quantity supplied goes down
As the price of Jordans goes up, quantity demanded goes up
As the price of Jordans goes up, quantity supplied goes up
As the price of Jordans goes up, the quantity demanded down
14
How does a surplus affect price?
A surplus causes prices to rise
None of the above
A surplus does not affect price
A surplus causes prices to fall
15
How does a shortage affect price?
A shortage does not affect price
None of the above
A shortage causes price to go up
A shortage causes prices to go down
16
The desire for suppliers/entrepreneurs to produce more to make money in a market economy is:
The profit incentive
The substitution effect
The law of demand
Diminishing Marginal Utility
17
What is the driving force behind the law of supply? Why does the law of supply exist?
Because of the profit incentive
Because of the substitution effect
Because of diminishing marginal utility
Because of the real income effect
18
A change in quantity demanded can be caused by only which of the following?
A change in the determinants
A change in demand
A change in elasticity
A change in price
19
Which of the following would cause a change in demand REGARDLESS OF PRICE?
None of these
The elasticity of demand
A change in price
The determinants of demand

Unit 2 EOY Review Flashcards | StudBud