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AP MICRO UNIT 2 Flashcards | StudBud
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AP MICRO UNIT 2
AP MICRO UNIT 2
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Unit 2 questions
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1
Law of Suppy- There is a(n) __________ relationship between price and quantity demanded
direct
indirect
decent
inverse
2
A price control does what to a market?
makes it more efficient
reduces shortages
balances the market fairly
creates dead weight loss
3
The Law of Demand- There is a(n) _______ relationship between price and quantity demanded.
individual
direct
indecent
inverse
4
This graphic is modeling what?
a butter shortage during a hurricane
price doesn't shift the curve
one of the shifters of demand
the income effect
5
What is this economic model trying to represent?
Ryan Gosling is an awesome model
milk
The price of related goods is a shifter of demand.
pizza
6
You recently get a raise and your income increases. What will happen?
Your demand for Tesla cars (a normal good) will decrease.
Price doesn't shift the curve.
Your supply for Spam (an inferior good) will increase.
Your demand for Spam (an inferior good) will decrease.
7
What is the force that guides a market towards equilibrium?
an "invisible hand"
sellers
the government
buyers
8
This graphic is modeling what?
the relationship between substitue goods
a change in quantity demand and a change in demand
the relationship between complimentary goods
the relationship between price controls and the government
9
Which of the following will cause the
demand
for milk to decrease?
Increase in the price of a substitute
A decrease in the price of milk
A decrease in income assuming that milk is a normal good
A decrease in the price of a complementary good
10
You recently get a raise and your income increases. What will happen?
Price doesn't shift the curve.
Your demand for ramen (an inferior good) will increase
Your supply of steak (a normal good) will increase
Your demand for steak (a normal good) will increase
11
The model shown depicts
a price ceiling
a price floor
a shortage
an efficient market
12
In the production of Pizza, new crust making tech is created. What will happen?
(in best pirate voice) PRICE DOESN'T SHIFT THE CURVE!
quantity supplied increases
Demand increases
supply increases
13
Given this model of a price floor, producer surplus would be
Area A+B+C+D+E
Area A
Area B+C
Area D+E
14
Which of the following will cause the
quantity demanded
of milk to decrease?
Increase in the price of a substitute
An increase in the price of milk
A decrease in income assuming that milk is a normal good
A decrease in the price of a complementary good
15
Why would someone not value the 5th or 6th purchase of the same item as much as the 1st?
income effect
the law of diminishing marginal utility
# of consumers
substitution effect
16
If both supply and demand shift what is the rule?
The new equilibrium price or quantity will be indeterminate
The new equilibrium price and quantity will be indeterminate
Price doesn't shift the curve
The equilibrium price and quantity will increase
17
Calculate the consumer surplus given the graph
11
3
6
24
18
When quantity demanded is greater than quantity supplied at a given price
shortage
dead weight loss
surplus
marginal
19
Calculate the producer surplus given the graph
11.5
1.5
8.5
24.1
20
What is the marginal utility of the 3rd slice of bread?
20
40
price doesn't shift the curve
130
