Which of the following would cause a decrease in supply?

price of a key raw material increases

Which is the best example of the substitution effect?

when cost of pizza goes up people buy more hamburgers

When a business invests in physical capital, how does it most affect the market?

it forcesother producers to find ways to stay competitive

Why is the US economy considered mixed economy?

it has elements of both market and command economies

How do labor unions most impact a competitive market

increase the cost of production

According to the law of supply which is true?

supply is greater at a higher price then a lower price

What is one role the US government plays in our economy?

protects the property rights ofi individuals and business

If the population in the US declined what would happen in the factor market?

flow of labor to business would decrease

Which statememt would Karl Marx agree with?

from each their ability to each their need

Which best illustrates the elasticity of demand for insulin?

a change in the price of insulin does not affect demand

How do increased prices serve as an incentive for businesses?

they signal increased profit opportunities

What effect would an increase in population have on a supply and demand graph?

move the demand curve to the right

How does the government protect the consumer

sets health and safety standards

Which is one difference between the US and Cuba?

In US market answers basic economic questions

How do households keep markets competitive?

look for a variety of choices at a lower price

Which government policy would most increase demand for new windows?

new tax incentives for people buying energy efficient window

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Economics Benchmark U1

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Questions 30

Answers

1
Which of the following would cause a decrease in supply?
price of a complementary good decreases
price of a key raw material increases
price paid for labor decreases
price of a substitute good increases
2
Which is the best example of the substitution effect?
when cost of college goes up people study harder in school
when cost of pizza goes up people buy more hamburgers
when cost of bread goes up people buy less peanut butter
when gas prices go up people drive fewer miles
3
Why do companies invest innew technology?
increase price floors
increase wage rates
increase unemployment
increase efficiency
4
When a business invests in physical capital, how does it most affect the market?
forces businesses to outsource
it forcesother producers to find ways to stay competitive
it forces the national unemployment rate to rise
forces consumers to pay higher prices
5
Why is the US economy considered mixed economy?
it has elements of both market and command economies
creates a wide variety of consumer goods and services
it allows the use of both currency and bartering
It creates jobs
6
How do labor unions most impact a competitive market
increase the cost of production
increase marginal revenue
increase supply of goods
increase profit margins
7
Which of the following is found in the factor market?
flow of revenue to business
flow of labor to business
flow of goods to business
flow of services to business
8
According to the law of supply which is true?
supply is greater at a higher price then a lower price
quantity supplied decreases when demand increases
quantity supplied decreases when cost of production decrease
quantity of goods supplied equals quantity demanded
9
What is an advantage of a command economy?
efficient use of scarce resources
full employment
competitive marketplace
availability of variety of goods
10
What is one role the US government plays in our economy?
it establishes equilibrium prices for goods
protects the property rights ofi individuals and business
guarantees a supply of productive resources to manufacturers
determines the supply levels of most goods
11
When inventories increase, what is one incentive that businesses can use to attract buyers?
lower prices
increased supply
decreased demand
higher wages
12
If the population in the US declined what would happen in the factor market?
demand for goods and services would decrease
demand for services would increase
flow of labor to business would decrease
flow of labor to household would decrease
13
Which statememt would Karl Marx agree with?
markets are guided by invisible hand
from each their ability to each their need
when business is profitable, consumers benefit
competition leads to higher quality and lower price
14
The relationship between the price of hot dog and the demand for hot dog buns is an example of
complementary goods
substitute goods
normal goods
inferior goods
15
Which best illustrates the elasticity of demand for insulin?
one company controls the demand curve for insulin
higher insulin prices increase the elasticity
elasticity of demand for insulin depends on the supply
a change in the price of insulin does not affect demand
16
How do increased prices serve as an incentive for businesses?
they signal higher production costs
they signal a lower equilibrium
they signal decreased competition
they signal increased profit opportunities
17
Why would a business pay for an employees education?
increase demand
reduce elasticity
reduce externalities
increase productivity
18
What is one advantage of a market economy?
security
stability
equity
efficiency
19
What effect would an increase in population have on a supply and demand graph?
move the demand curve to the right
move the demand curve to the left
lower the equilibrium price
reduce the quantity purchased at all prices
20
Which best explains an increase in the number of hybrid vehicles sold?
increasing supply of automobiles
falling profit margin
rising oil prices
decreasing levels of competition
21
Which concept best explains why large retail stores affect small businesses' ability to compete
elasticity of demand
marginal utility
economies of scale
equilibrium price
22
According to the law of demand how do consumers respond to changes in the market?
they buy less when supply increases
they change the total supply of productive resources
they buy more at a lower price
they refuse to buy at the equilibrium price
23
How does the government protect the consumer
provides incentives for producers ti increase production
determines the price of most goods and services
establishes the equilibrium price for goods
sets health and safety standards
24
Which is one difference between the US and Cuba?
In the US the government decides how goods will be produced
In Cuba market determines means of production
in Cuba economic decisions made by consumer demand
In US market answers basic economic questions
25
How do households keep markets competitive?
increase the supply of goods
look for a variety of choices at a lower price
set minimum wage
force industries to reduce the unemployment rate
26
Which government policy would most increase demand for new windows?
new tax incentives for people buying energy efficient window
reduction infuel costs for businesses producing windows
passage of stronger safety standards for windows
a limit on the number of businesses that can produce windows
27
If there is a surplus in the market what should a business do to clear the market
lower the price
raise the quantity supplied
raise the price
lower the quantity demanded
28
Which flows from the business to the household?
services
entrepreneurs
resources
taxes
29
What happens when production costs for a good go down?
the price increases
number of suppliers decreases
total supply increases
demand decreases
30
What is a result of a command economy?
high unemployment
high levels of competition
frequent changes in demand
frequent shortages of goods

Economics Benchmark U1 Flashcards | StudBud