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Supply, Demand, and Prices Flashcards | StudBud
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Supply, Demand, and Prices
Supply, Demand, and Prices
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Supply and Demand Review
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Questions
25
Answers
1
The more of a product you consume, the less extra satisfaction you get. What is this called?
Diminishing Return
Law of Supply
Law of Demand
Diminishing Marginal Utility
2
What results from an increase in the cost of resources needed to produce a good?
Increase in supply
Increase in demand
Decrease in demand
Decrease in supply
3
When the government rations essential items like food it can create a:
Excess demand
Black market
government shortage
government surplus
4
What does the location marked "X" represent on the graph?
Equilibrium Price
Surplus
Shortage
5
What is cost is "the next best choice" that you didn't make?
Implicit cost
Opportunity cost
Hidden cost
Explicit cost
6
In a market economy, prices serve to do all of these EXCEPT:
indicate whether to increase or decrease production
Ensure fairness and equity in the market
Signal the level of demand for a product
Convey information about a product
7
Bagels and cream cheese are examples of what type of goods?
Complementary goods
Substitute goods
8
According to the Law of Supply, what do suppliers do when prices decrease?
Produce more
Produce less
Produce the same amount
9
A minimum wage is an example of a:
price ceiling
market price
price floor
equilibrium price
10
Rent control is an example of a:
negotiated price
equilibrium price
price floor
price ceiling
11
What happens to prices during a shortage?
Prices rise
Prices fall
Prices stay the same
12
A decrease in the number of tourists visiting Disneyland due to a recession is a:
Change in the Number of Consumers
Change in Consumer Income
Change in Consumer Expectations
Change in Consumer Tastes and Preferences
13
According to the Law of Demand, what happens to demand when prices increases?
Demand rises
Nothing happens
Demand falls
14
Which of the lines on this graph is the SUPPLY curve?
Blue line
Red line
15
Is the demand curve elastic or inelastic?
Inelastic
Elastic
Perfectly Elastic
Perfectly Inelastic
16
Pepsi and Coke are examples of what type of good?
Substitute Goods
Complementary Goods
17
What results from a decrease in productivity?
A decrease in demand
An increase in supply
An increase in demand
A decrease in supply
18
What gives goods their value?
Usefulness
Scarcity
Age
Desirability
19
What type of good is used to manufacture other goods?
Service goods
Production goods
Consumer goods
Capital goods
20
What results from an increase in taxes?
A decrease in supply
A decrease in demand
An increase in demand
An increase in supply
21
According to the graph, what is the equilibrium price?
$2
$3
$1
$4
22
What results from an increase in productivity?
An increase in supply
A decrease in supply
A decrease in demand
An increase in demand
23
Is the demand curve inelastic or elastic?
Perfectly Elastic
Inelastic
Perfectly Inelastic
Elastic
24
What does this graph illustrate?
Decrease in demand
Increase in demand
Decrease in supply
Increase in supply
25
Who came up with the "invisible hand" theory?
John Keynes
John Smith
Adam Smith
Ben Franklin
