Which of the following is the best example of the law of supply?

A shop ups the # of items they supply when the price goes up

What determines the price and the quantity produced of most goods?

the interaction of supply and demand

What happens when wages are set above the equilibrium level by law?

Firms employ fewer workers than they would at the eq. wage.

A shift in the demand curve means which of the following?

a change in demand at every price

What is the major difference between a corporation and other kinds of businesses?

A corp. is a separate entity apart from that of the owners

What is a basic principle of the law of demand?

When a good’s price is lower, people will buy more of it

When the selling price of a good goes up, what is the relationship to the quantity supplied?

It becomes practical to produce more goods

A shortage will develop when

the market price is below the equilibrium price

The price of movie tickets in a town has risen from $7 to $9. What is the most likely effect?

The quantity demanded of movie tickets will decrease

What are inferior goods?

goods for which the demand falls when income rises

Which of these events would indicate a movement along a supply curve for batteries?

raise the price of eight AA batteries from $3.50 to $3.95

In response to rising car traffic, demand for bikes has increased. The new eq point will show

more bicycles sold, but at a higher price

What is happening in this graph?

Quantity demanded is decreasing

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Unit #2 Review

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Review for unit 2 test

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Questions 22

Answers

1
Which of the following is the best example of the law of supply?
A shop ups the # of items they supply when the price goes up
A food producer increases the # of acres of wheat he grows
A milling company builds a new factory to export flour
A catering company buys a new dishwasher
2
In monopolistic competition, how much control do producers have over the price of their product
None
Mostly control the price, but with government regulation
Some control over price
Total
3
If Supply increases, what will be the new equilibrium point?
A
D
B
C
4
What is happening in this graph?
Demand Decrease
Supply Decrease
Supply Increase
Demand Increase
5
The surplus is caused by a...
Price Floor
Price Ceiling
Price drop
Equilibrium Price
6
When buyers will purchase exactly as much as sellers are willing to sell
supply and demand
price floor
equilibrium
excess demand
7
What determines the price and the quantity produced of most goods?
the interaction of supply and demand
the availability of substitutes for the goods
the quality of the goods that are produced
the consumer’s perception of necessity
8
What happens when wages are set above the equilibrium level by law?
Firms tend to try to break the law and hire people for low $
Firms hire more workers but for fewer hours at the eq wage
Firms employ fewer workers than they would at the eq. wage.
Firms employ more workers than they would at the eq. wage
9
A shift in the demand curve means which of the following?
a change in demand at every price
a rise in prices
a decrease in both price and quantity demanded
a change in consumer income
10
What is the major difference between a corporation and other kinds of businesses?
A corporation is not responsible for its debts if it fails
A corp. has officers who are responsible for the business
A corp. is a separate entity apart from that of the owners
A corporation is much larger
11
Which of the following markets is an example of monopolistic competition?
oil
water
bookbags
cars
12
What is a basic principle of the law of demand?
The higher the price, the more people will want the good.
Services are of interest in the same way that goods are.
Everyone has a limited income that they will spend.
When a good’s price is lower, people will buy more of it
13
When the selling price of a good goes up, what is the relationship to the quantity supplied?
The cost of production goes down
The profit made on each item goes down
It becomes practical to produce more goods
There is no relationship between the two
14
A shortage will develop when
the market price is below the equilibrium price
the government provides subsidies to producers
the QS of a good is greater than the QD of that good
the equilibrium QS is lower than the actual QS
15
The price of movie tickets in a town has risen from $7 to $9. What is the most likely effect?
The demand curve for movie tickets will move left
The quantity demanded of movie tickets will increase.
The quantity demanded of movie tickets will decrease
The demand curve for movie tickets will move right
16
If Demand increases what will the new equilibrium point be?
B
A
D
C
17
What are inferior goods?
goods that no one wants to buy
goods for which the demand falls when income rises
goods for which the demand falls when income falls
goods that are not well produced
18
Which is and advantage of a sole proprietor?
unlimited liability
limited liability
Easy start up
2x the taxes
19
A slice of pizza costs $4.00, what is her quantity demanded of pizza at this price?
3
0
2
1
20
Which of these events would indicate a movement along a supply curve for batteries?
A new law requires battery manufacturers to spend more money
raise the price of eight AA batteries from $3.50 to $3.95
Workers at a major battery factory go on strike
trade agreement enables stores to import foreign batteries
21
In response to rising car traffic, demand for bikes has increased. The new eq point will show
fewer bicycles sold, but at a higher price
fewer bicycles sold, but at a higher price
more bicycles sold, but at a higher price
more bicycles sold, but at a lower price
22
What is happening in this graph?
Demand is increasing.
Quantity demanded is increasing.
Demand is decreasing.
Quantity demanded is decreasing

Unit #2 Review Flashcards | StudBud