Market externalities demonstrate that

people other than the buyers and producers can be affected

The law of demand demonstrates

an inverse relationship between price and quantity demanded

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Economics Unit 2: How Markets Work

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Questions 15

Answers

1
Minimum wage is an example of a
free rider problem
price ceiling
result if invisible hand theory
price floor
2
When the government deregulates businesses, supply will
bottom out
focus on the environment
shift to the left
shift to the right
3
The following things cause a shift in overall demand:
all of the above
price of a substitute
price of a compliment
consumer expectations
4
A newfound technological innovation causes supply to shift
to the right
to the left
to remain the same
to equalize
5
Market externalities demonstrate that
the markets never fail
only consumers are affected by purchased goods
every man is an island
people other than the buyers and producers can be affected
6
If the price of a compliment good goes down, demand for that good will
shift to the left
move to disequilibrium
remain the same
shift to the right
7
Which of the following cause a shift in overall supply?
technology
# of producers
cost of inputs
all of the above
8
Factors that represent a monopoly are
all of the above
one producer
unique product
no competition
9
Rationing and the black market are
disequilibrium
shortage
excess demand
all of the above
10
A civil conflict or war usually causes supply to
shift to the left
shift to the right
equalize
stop totally
11
In a recession, demand for all goods and services
is at equilibrium
shifts to the left
shifts to the right
is at disequilibrium
12
The law of supply demonstrates that
suppliers want to make profits
customers are greedy
money cannot buy happiness
consumers will pay expensive prices
13
When people expect a sale on a good in the future, today's demand for that good
shifts to the right
shifts to the left
doesn't change
remains at equilibrium
14
When the government increases taxes on businesses, supply will
bottom out
stay the same
shift to the right
shift to the left
15
The law of demand demonstrates
customers buy expenses goods
as price goes down, quantity demanded goes down
an inverse relationship between price and quantity demanded
as price goes up, quantity demanded goes up

Economics Unit 2: How Markets Work Flashcards | StudBud