Chapter 4, 5 & 6 Test Review

Question 1

Prices related in a way that an increase in the price of one increases the demand for the other

Accepted Answer

substitutes

Question 2

A subsidy is

Accepted Answer

a government payment to support a business or market

Question 3

The desire, ability, and willingness to buy a product or service is called

Accepted Answer

demand

Question 4

The amount of goods available for sale is called

Accepted Answer

supply

Question 5

A cost that does NOT change no matter how much of a good is produced is called a

Accepted Answer

fixed cost

Question 6

The purpose of advertising is to increase demand for a product or service

Accepted Answer

True

Question 7

When the price of something increases, the quantity demanded

Accepted Answer

decreases

Question 8

Situation where quantity supplied is greater than the quantity demanded

Accepted Answer

surplus

Question 9

The monetary value of a product

Accepted Answer

price

Question 10

Which is the main cause of a change in quantity demanded?

Accepted Answer

price

Question 11

Situation where quantity supplied is less than quantity demanded

Accepted Answer

shortage

Question 12

A chart that lists how much of a good all suppliers will offer at different prices is called

Accepted Answer

a market supply schedule

Question 13

System of allocating good and services without prices

Accepted Answer

rationing

Question 14

Which product would most likely have a demand that is inelastic?

Accepted Answer

a vital medicine

Question 15

A market in which goods are sold illegally

Accepted Answer

black market

Question 16

The two variables on a demand curve are

Accepted Answer

price and quantity

Questions 16