A production possibility frontier represents

the maximum amount of goods that can be made.

What is price elastic demand?

The percentage change in demand is greater than percentage change in price

If the price of steel used to make cars falls sharply, what would be one effect?

the supply curve for cars would shift to the right

What is the law of supply?

As the price of a good rises, the quantity supplied rises.

Which of the following might result in a rightward shift in the demand curve?

An increase in consumer confidence and expectations

cost of choosing one opportunity or investment over another

All other things being equal, what results from a rightward shift in the demand curve?

A rise in the equilibrium price

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S5 Economics 1st Semester Review

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Questions 27

Answers

1
For a product with perfectly inelastic demand, what impact does an increase in price have on quantity demanded?
increase in quantity demand
Impossible to say from given information
no effect
decrease in quantity demanded
2
Is demand for gasoline likely to be elastic or inelastic
Inelastic
Elastic
3
A price ceiling (below the equilibrium price) is often associated with
A surplus
Minimum prices for key items, such as milk
A shortage
free market economic policies
4
A production possibility frontier represents
the technology that should be used.
how many people to hire.
the maximum amount of goods that can be made.
the resources that should be used.
5
What is price elastic demand?
The price increases because there is a higher demand
The percentage change in demand is greater than percentage change in price
The change in price is the same as increase in demand
How many people want a rubber band
6
If the price of steel used to make cars falls sharply, what would be one effect?
The supply curve for cars would shift to the left
The demand curve for cars would shift to the right
The demand curve for cars should shift to the right
the supply curve for cars would shift to the right
7
A minimum wage is an example of a
price floor
price ceiling
monetary policy action
free market action
8
The term for a product which follows the principles of the Law of Demand:
inferior Good
Giffen Good
Equilibrium Product
Normal Good
9
When demand is more elastic than supply, the tax burden falls on ________
the sellers
the buyers
10
What is the law of supply?
As the price of a good rises, the quantity supplied rises.
As the price rises, the quantity supplied decreases.
As the price rises, the quantity supplied goes down.
As the price of a good decreases, the quantity rises.
11
Which of the following is NOT one of the four factors of production
Labor
Capital
Mechanization
Land
12
This term applies to situations where consumers buy less of a product when their incomes rise
Inferior Good
Giffen Good
Luxury Good
Normal Good
13
Which of the following might result in a rightward shift in the demand curve?
A decrease in the cost of producing oil
An increase in taxes
the discovery of a new tchnology that reduces oil consumption
An increase in consumer confidence and expectations
14
The government imposes a price ceiling below the equilibrium price. What is the result?
a shortage of the good
quantity demanded decreases
an increase in the quality of the good
quantity supplied increases
15
opportunity cost
cost of selling a business to begin another
earning the best profit possible
cost of operating a business
cost of choosing one opportunity or investment over another
16
One of the potential disadvantages of rent control is which of the following:
The supply of housing may fall
Landlords might overinvest in fixing apartments
Fewer consumers could afford to rent homes or apartments
Too many news homes max be constructed at the same time
17
Economists often criticize a price floor because it can result in a
fall in supply
shift of the demand curve
surplus
shortage
18
What does equilibrium mean?
A point where QS=QD
A point where QS<QD
A point where P=QS
A point where QS>QD
19
A leftward shift of demand and a leftward shift of supply will:
decrease equilibrium price
increase equilibrium price
increase equilibrium quantity
decrease equilibrium quantity
20
How does competition affect supply?
It usually increases supply.
Supply is affected.
It usually decreases supply.
Supply is not affected.
21
when demand is inelastic, it is......................... to a change in price
Irrelevant
Responsive
Not responsive
Directly proportional
22
Which of these is inelastic?
restaurant meals
doctor services
automobiles
videogames
23
Products with close substitutes have ______ elastic demand
more
less
24
In what circumstance would supply of a product be elastic?
it takes time to produce
it is costly to produce
it can be stored
it uses resources which are in short supply
25
All other things being equal, what results from a rightward shift in the demand curve?
A drop in consumer spending
A shift in the supply curve
A rise in the equilibrium price
A fall in the equilibrium price
26
By producing more one more Elmo toy, we gave up producing one Big Bird toy. The Big Bird Toy would be:
the profit maximizing point
the fixed cost
the variable cost
the opportunity cost
27
Which of the following products is most likely an inferior good
High-End wine
Frozen Pizza
A Diamond Ring
A nice, new car

S5 Economics 1st Semester Review Flashcards | StudBud