What a would a decrease in the price of a substitute good for light bulbs cause?

Decrease in demand for light bulbs.

What does this graph show?

perfectly inelastic supply, perfectly inelastic demand

What happens to elasticity of demand for a good over time?

Becomes more elastic as consumers identify substitutes.

Under which of the following circumstances has market equilibrium not been reached?

There is excess supply in the market

How is market equilibrium established?

Buyers and sellers interact in markets to determine prices

Why does market failure occur?

Market prices often do not reflect social or indirect costs

What causes a decrease in demand?

the rise of the price of complementary goods

What is the price elasticity of supply most affected by?

the time lags after a price change

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Year 11 Economics - Topic 3 - Markets

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Topic 3

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Questions 17

Answers

1
The term used when the market forces of demand and supply result in the equilibrium price
The market function
The market mechanism
The price function
The price mechanism
2
A small number of large firms dominate in the industry. What type of market power is this?
Monopolistic competition
Monopoly
Pure competition
Oligopoly
3
This graph shows
a contraction of demand
an expanstion of demand
a decrease in demand
an increase in demand
4
What a would a decrease in the price of a substitute good for light bulbs cause?
Decrease in demand for light bulbs.
Contraction in demand for light bulbs.
Increase in demand for light bulbs.
Expansion in demand for light bulbs.
5
What is this graph?
price wall
price floor
the market mechanism
price ceiling
6
What does this graph show?
perfectly inelastic supply
perfectly elastic demand
perfectly elastic supply
perfectly inelastic demand
7
What happens to elasticity of demand for a good over time?
Elasticity remains constant over time.
Becomes more inelastic as consumers become more accustomed.
Becomes more elastic as consumers identify substitutes.
Becomes more inelastic as consumers buy goods in bulk.
8
Under which of the following circumstances has market equilibrium not been reached?
There is excess supply in the market
The quantity demanded equals the quantity supplied
The market clears
There is no tendency to change
9
How is market equilibrium established?
Interest rates
Consumers set it through buying products
Banks and government spending
Buyers and sellers interact in markets to determine prices
10
A firm is operation with excess capacity. In the short run, what is their supply likely to be?
relatively inelastic
unit elastic
perfectly elastic
Relatively elastic
11
One factor that makes entrepreneurs unwilling to produce public goods is
the lack of positive externalities
the existence of free riders
the scarcity of free riders
the presence of negative externalities
12
An economy's ability to allocate resources to satisfy consumer wants and needs is
a public good
a positive externality
allocative efficiency
factor market efficiency
13
Why does market failure occur?
all markets operate in a setting of pure competition
Price floors and ceilings fail to equate quantity demanded
Demand and supply curves are based on costs for individuals
Market prices often do not reflect social or indirect costs
14
What causes a decrease in demand?
an increase in the size of a population
a rise in the price of substitute goods
an increase in consumer income
the rise of the price of complementary goods
15
What is the price elasticity of supply most affected by?
the level of taxation of a good
the level of minimum wage
the number of firms producing the good
the time lags after a price change
16
A public good is
excludable and non rival
non excludable and non rival
non excludable and rival
excludable and rival
17
This graph shows
an increase in supply
a contraction of supply
an expansion of supply
a decrease in supply

Year 11 Economics - Topic 3 - Markets Flashcards | StudBud