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Economics Unit 2 Flashcards | StudBud
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Economics Unit 2
Economics Unit 2
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Answers
1
which of the following is NOT a reason why prices are so effective at performing allocation
prices favor neither the producer nor the consumer
prices are something you have known for your entire life
prices remain relatively stable through unexpected events
competitive markets find their own prices without trouble
2
the federal or state minimum wage is an example of
price floor
price limitation
none of the above
price ceiling
3
Consumer's willingness to replace a costly item with a less costly item is an example of:
the income effect
the substitution effect
complements
demand elasticity
4
at a given price, a surplus occurs when
the quantity supplied is greater than the demand
the quantity demanded is the same as supplied
the quantity demanded is more than supplied
the quantity supplied is less than the demand
5
when employees are getting in each other's way, the firm is operating in
in stage 1 of production
in stage 2 of production
peak performance
in stage 3 of production
6
at what price does the supply meet the demand, leaving no shortage or surplus?
unit price
equilibrium price
sale price
market price
7
when demand decreases, the curve shifts to the
left
center
right
middle
8
the law of demand shows this type of relationship between price & demand
inverse
direct
rocky
unequal
9
Advertising, fashion trends, and new product introductions serve to:
increase income effectiveness
create consumer demand
minimize the income effect
create consumer needs
10
when producers offer fewer products for sale at each and every price
the price per unit has decreased
they expect subsidies
the supply curve has shifted to the right
the supply curve has shifted to the left
11
a legal cap or max price that can be charged for a product is called a
price floor
price ceiling
none of the above
price limitation
12
the level of profit-maximizing output is reached when marginal cost is
double marginal revenue
less than marginal value
equal to marginal value
one-half of marginal revenue
13
if supply increases, the supply curve will shift to the
right
left
center
middle
14
period of production where producers can adjust all quantities of their resources
Christmas Eve
short run
long run
Black Friday
15
the 3 stages of production IN ORDER from most productive to least are
diminishing returns, increasing returns, & economic returns
negative returns, diminshing returns, & positive returns
increasing returns, diminishing returns, & negative returns
positive returns, negative returns, & declining returns
16
in a market economy, high price is a signal for
producers to supply less & consumers to buy less
producers to supply more & consumers to buy less
government to intervene to protect consumers
producers to supply more & consumers to buy more
17
why are many businesses engaging in e-commerce?
operating costs never increase
subsidies are available
fixed costs are minimal resulting in low overhead
variable costs can be eliminated
18
total cost is the sum of the
fixed and variable costs
all variable costs
fixed costs and overhead
fixed and marginal costs
19
Demand for a product increases/decreases the same proportion as price changes: that product is
unit elastic
inelastic
elastic
complementary
20
the theory of production deals with the relationship between factors of production &
cost of marginal returns
cost of raw materials
fixed costs
the output of goods & services
21
a partial refund of the original price is called a
price floor
price ceiling
rebate
coupon
22
all of the following are characteristics of allocation by rationing EXCEPT
high administrative cost
diminished incentive for workers
fair distribution of goods
efficiency
23
The supply of a product normally decreases if:
the price of a product increases
taxes on the product increase
cost of inputs goes down
more producers enter the market
24
what is the sum of all individual demand curves
supply demand curve
total demand curve
market demand curve
equilibrium point
25
An increase in the price of milk causes a decrease in the demand for cereal. The 2 products are
unrelated
complementary
demand elastic
substitutes
26
when a customer's need for a product is not urgent, demand tends to be
inelastic
elastic
unit elastic
complementary
27
can purchase be delayed, are there substitutes, & is purchase expensive are questions that
determine elasticity
determine equilibrium
determine sales price
determine market price
28
the theory of competitive pricing is
effective when large price swings occur
when items are similarly priced at different nearby stores
an imperfect modelof market performance
demonstrating the need for price floors & ceilings
29
gov't initiative to spark economic activity or influence behavior (usually done in tax breaks)
allocation
substitute
subsidy
representation taxation
30
Because a large price increase has little or no effect, the demand for the product is
inelastic
elastic
unit elastic
complementary
31
output will change as only 1 variable is changed (usually labor) in what period of production
depression
long run
recession
short run
32
what relates changes in the quantity demanded to changes in prices?
supply elasticity
demand elasticity
income effect
diminishing returns
33
All of the following can change the market supply curve EXCEPT
expectations that prices are about to increase
cost of labor
the number of sellers offering the product
change in the demand for the product
34
rent payments and property taxes would be counted as
variable costs
fixed costs
marginal costs
total costs
35
For most products & services, increased price results in:
increased demand for compliments
demand for more products
reduced demand for substitutes
demand for fewer products
36
this will make you feel wealthier if the price of entertainment drops
the income effect
Beibernomics
Reaganomics
the luxury tax
37
An increase in the $ of cameras results in a decrease in the demand for film because they are
complementary
substitutes
demand elastic
unrelated
