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Unit II Review: Supply, Demand, & Equilibrium Flashcards | StudBud
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Unit II Review: Supply, Demand, & Equilibrium
Unit II Review: Supply, Demand, & Equilibrium
30 terms
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StudBud Administration
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Review of vocabulary, concepts, and application of market equilibrium
Flashcards
30 cards
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Practice quiz
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Questions
30
Answers
1
To an economist, consumer demand means:
Consumer able to buy, but not at current price
Consumer is willing and able to buy at current price
Consumer wants to buy, but may not have the money
Consumer able to afford, but unwilling to buy
2
New regulations require cars to have anti-theft devices. Which graphs shows the supply of cars?
Graph 3
Graph 4
3
What is the basic principle of the law of supply?
Higher the price, large the quantity produced
Lower the price, large the quantity consumed
If price of good falls, new firms may enter the market
If price of a good rises, some firms will produce less
4
A price of $60 in this market will result in
equilibrium
price ceiling
a shortage
a surplus
5
What line indicates decrease in demand?
C
B
A
6
Price of hot dog buns rises; Demand curve for hot dogs shifts left. What could cause this?
Supply for hot dogs increases
Demand for hot dogs decreases
Supply for hot dogs decreases
Demand for hot dogs increases
7
How can expectations about future price affect consumer demand?
Immediate demand rises if price expected to rise in future
Immediate demand to related to future price expectations
Price expected to stay same, immediate demand will decrease
Good expected to be plentiful, demand not affected
8
If sellers expect the price of a good to rise in the future, they will
put more goods on the market now
store their goods now and plan to sell more in future
raise their prices now
set prices according to the law of demand
9
The price of a pound of coffee has tripled. Which graph the shift in the demand for tea?
Graph 1
Graph 2
10
What might cause a shift in the curve from C to A?
Dramatic population increase
Government add usage tax
Suppliers expect higher prices in the future
Popular toy loses appeal
11
What is the best definition of a supply curve?
graphic representation of supply determinants
shows how supply of goods is kept in balance
shows excess supply in the market
graph of the quantity supplied of a good at different prices
12
Which leads to an increase in supply?
Decrease in the cost of raw materials
Change in the law of supply
Diminishing marginal returns
An increase in the cost of raw materials
13
What is the best definition of a demand curve?
Market forces push toward equilibrium
Graphic respresentation of a demand schedule
Payment to the government on the production of a good
Excess demand in the market
14
Which of the following is an example of lower production costs brought about by technology?
importing fresh vegetables instead of using canned
robots working 24 hours a day on an assembly line
making of bread in local shops rather than large bakiers
delivery cost of gas to consumers by diesel trucks
15
Which is an example of a government price ceiling?
base-level wage
minimum employment
rent control
market equilibrium rate
16
Pete's Pastries expects higher prices during the holidays. Which graph is affect on supply?
Graph 3
Graph 4
17
What line indicates an increase of supply?
C
D
B
18
Club soda found to cause high blood pressure. Which graph is the shift in demand for club soda?
Graph 2
Graph 1
19
What might cause a shift in the curve from B to C?
break-through new technology
Average annual income declines
Price of complementary good goes down
Increased cost of raw materials
20
The basic principle of the law of demand is:
Higher the price, the more consumers buy
Lower the price, the more consumers will buy
Lower the price, the more consumers will subsitute
Lower the price, the less consumers will buy
21
When the government sets a price floor on earnings, it is called
minimum wage
base-level wage
employment guarantee
market equilibrium
22
Fifteen companies stop producing hoverboards. Which graph shows the supply of hoverboards?
Graph 4
Graphs 3
23
What would be the effect of higher labor costs on the supply curve of turnip pies?
Curve is not affected
Reverses direction
Shifts left
Shifts right
24
Most people will drink either Mr. Pibb or Dr. Pepper because these are considered _____.
Inelastic demand
Supply
Substitutes
Complements
25
What letter indicates an increase in equilibrium quantity?
C
D
E
26
What letter indicates an increase in equilibrium price?
D
C
E
27
Dealer pricing on cars ends 2/28, which graph shows the demand for cars on 2/15?
Graph 1
Graph 2
28
Which price level best reflects the market at equilibrium?
$13
$10
$14
$12
29
Which of the following cause a shift in demand?
Change in government tax structure
An increase in consumers' income
Suppliers' expectations of a price increase
Change in technology
30
Equilibrium will be reached at
Price $40 Quantity 150
Price $40 Quantity 50
Price $20 Quantity 200
Price $60 Quantity 100
