In the market clearing price,

the supply by sellers meets the demand from buyers

What happens in the product market?

producers sell goods and services to consumers

In a market economy, a high price will usually cause

producers to offer more and consumers to buy less

A decrease in the price of a product will result in

an increase in quantity demanded of that product

What should happen to the equilibrium price of wooden desks when the price of wood declines?

the equilibrium price will fall

Which type of transaction refers to a flow of money through the economy?

money is used to purchase goods from product market

What is the primary purpose of the circular flow diagram?

to show how households & businesses interact in our economy

studbud

Economics Unit 2 Review

22 termsStudBud Administration326 plays

SSEMI 1-4

Flashcards22 cardsFPractice quizPHost liveL

Questions 22

Answers

1
If a product is sold & supplied at the intersection of supply & demand curves, there should be
an increase in price
no shortage and no surplus
a shortage until the price is raised
a change in the expected future price
2
In the circular flow diagram, where do individuals sell their labor?
in the factor market
in the revenue market
in the product market
in households
3
In the market clearing price,
the demand by buyers is rapidly growing
sellers have provided more than buyers demanded (surplus)
sellers have provided less that buyers demanded (shortage)
the supply by sellers meets the demand from buyers
4
What happens in the product market?
productive resources are bought and sold
a nation's total output of goods and services increases
amount of output produced by a certain input is measured
producers sell goods and services to consumers
5
In a market economy, a high price will usually cause
producers to offer more and consumers to buy less
producers to offer more and consumers to buy more
producers to offer less and consumers to buy more
producers to offer less and consumers to buy less
6
In the graph, the equilibrium price is approximately
$8
$6
$4
$10
7
A business organization where the management and ownership are separate functions
corporation
sole proprietorship
partnership
conglomerate
8
A decrease in the price of a product will result in
an increase in the quantity supplied of that product
a decrease in demand for that product
an increase in quantity demanded of that product
a shift in the production possibilities frontier
9
The point on a Supply and Demand graph where the S and D curves cross is called
shortage
equilibrium price
break even point
entrepreneurship
10
The quantity supplied of a product will increase when the price of that product increases
Equilibrium Price
Law of Supply
Law of Demand
Market Clearing Price
11
Coach Parker is liable for ALL debts of his company.What type of business organization is this?
corporation
partnership
sole proprietorship
conglomerate
12
What happens if the price is set above the equilibrium price?
higher equilibrium price
lower equilibrium price
a surplus occurs
a shortage occurs
13
Joe and Keily have a product they'd like to sell. What business structure do they use?
sole proprietorship
partnership
conglomerate
corporation
14
Where does quantity demanded equal quantity supplied? (Market clearing price/Equilibrium price)
$2
$6
$4
$8
15
A business organization which is owned by a single person
sole proprietorship
partnership
conglomerate
corporation
16
What is the most likely incentive for entrepreneurs to start a new business?
to risk financial failure
to create a new social benefit
to make a profit
to discover a new patent
17
What does this line represent?
supply
production possibilities
equilibrium price
demand
18
What should happen to the equilibrium price of wooden desks when the price of wood declines?
the price of substitute products will rise
the equilibrium price will fall
the equiibrium price will rise
the equilibrium price will stay the same
19
Which type of transaction refers to a flow of money through the economy?
money is used to purchase resources in product market
businesses pay for goods purchased in product market
individuals spend money to purchase resources
money is used to purchase goods from product market
20
In the graph, what happened to the equilibrium price when the supply curve moved from S1 to S2?
The equilibrium price went up
It did not change
The equilibrium price when down
It indicated a decrease in deman
21
When price of a good rises, amount demanded falls, & when price falls, amount demanded rises.
Market Structure
Equilibrium Price
Law of Supply
Law of Demand
22
What is the primary purpose of the circular flow diagram?
to indicate the changing tastes in the product market
to show how households & businesses interact in our economy
to show the need for government intervention
to show relationship between supply and demand

Economics Unit 2 Review Flashcards | StudBud