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Economics - Unit 2: Microeconomics Flashcards | StudBud
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Economics - Unit 2: Microeconomics
Economics - Unit 2: Microeconomics
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#economics #law #demand #supply
Flashcards
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Questions
25
Answers
1
Which of the following best describes why a
price ceiling
would lead to a
shortage
?
producers will supply less than demand because price is above equilibrium
producers will supply more than demand because price is above equilibrium
producers will supply less than demand because price is below equilibrium
producers will supply more than demand because price is below equilibrium
2
If prices stay the same but income is decreased, what is the effect on quantity demanded?
quantity demanded will decrease for normal goods
quantity demanded will decrease for inferior goods
quantity demanded increases for normal goods
quantity demanded stays the same for both normal and inferior goods
3
Which is an example of the law of demand at work?
price of pizza increases when price of cheese increases
price of pizza falls when quantity demanded for pizza falls
quantity demanded for pizza rises when price of pizza falls
quantity demanded for pizza increases when tacos become popular
4
How can expectations about the future change
immediate
demand for a good?
demand will rise if its price is expected to rise
demand will drop if there are no substitutes available
demand will rise if the good is expected to be plentiful
demand will drop if prices are expected to stay the same
5
Which of the following best describes the relationship between price and quantity according to the law of supply?
the are directly (positively) related
they are contra-positively related
they are inversely related
they are inconsistently related
6
Equilibrium price and equilibrium quantity are determined by
examining only the demand curve
examining only the supply curve
putting the supply and demand curves together
comparing surplus and shortage
7
The Law of Supply states that when prices are relatively low,
it is nearly impossible for companies to lose money.
supply is relatively low.
supply is relatively high.
people are more likely to purchase goods or services.
8
John gets a raise and starts buying ribeye steaks instead of Spam. For John, Spam is an example of a/an
inferior good
inelasticity
complement
normal good
9
What causes a shift in the demand curve?
change in price
change in supply
percentage change in price
change in demand
10
A
price floor
is considered a
price control
because it sets a price
median
minimum
equilibrium
maximum
11
When supply is greater than demand, what exists?
shortage
low prices
surplus
equilibrium
12
Butter and margarine are substitutes. Which of the following will happen if the price of butter increases?
demand curve for margarine shifts left
demand curve for butter shifts left
demand for margarine increases
demand for butter decreases
13
A sale on digital cameras causes the demand curve for memory cards to shift right. This is a result of which shifter?
income
price of related goods - complements
number of consumers
price of related goods - substitutes
14
According to the law of supply, when quantity supplied increases, it means
more goods are supplied because the price is lower.
more goods are supplied because the price is higher.
less goods are supplied because the price is higher.
suppliers are less willing to supply goods because of increased costs.
15
The substitution effect and the income effect describe
how income changes when buyers change jobs.
factors that influence consumer buying choices.
market changes that affect production of goods.
choices that producers make to improve goods.
16
In order to have
demand
for a good or service, a person must be either willing OR able to purchase it, but not both.
True
False
17
Which of the following is a way the government can manipulate prices at the microeconomic level?
regulations
seizing property
altering federal interest rates
printing money
18
Ford announces a truck with amazing new features comes out in 1 month. Demand for Ford trucks
now
will
stay the same and price will stay the same.
rise in anticipation of high prices.
decrease because people will wait for the new model.
increase in anticipation of higher prices.
19
If the government paid a subsidy to lemon farmers, what would be the impact on the price and quantity of lemons?
price would increase and quantity would decrease
price would decrease and quantity would increase
price would decrease and quantity would decrease
price would increase and quantity would increase
20
How does the substitution effect work when the price of an item drops?
more consumers buy the item as substitute for other similar items
consumers buy the item even if they don't want it
the item becomes less popular as price drops
other substitutes for the item also drop in price
21
If millions of coffee trees and shrubs died, what would it mean for Starbucks' supply curve for lattes?
fewer goods are supplied because the price is lower.
producers are willing to supply more at every price.
producers will now supply less at every price.
fewer goods are supplied because the price is higher.
22
When demand is greater than supply, what exists?
low prices
shortage
surplus
equilibrium
23
Which of the following events would cause supply of Starbucks lattes to increase?
Sellers expect coffee to become much more profitable in two years.
New technology is created that cuts latte production time in half.
Starbucks closes 25% of its stores.
Lack of sunshine and rain, which leads to smaller coffee bean harvests.
24
Which of the following best describes the relationship between price and quantity according to the law of demand?
the are directly (positively) related
they are inversely related
they are contra-positively related
they are inconsistently related
25
Ford announces a truck with amazing new features comes out in 1 month. What will be the impact on prices
now
prices will decrease because demand increased
prices will decrease because demand decreased
prices will increase because demand increased
prices will increase because demand decreased
