The Law of Supply states that

the quantity supplied will increase when the price increases

In the product market,

producers sell goods and services to consumers

In economics, "equilibrium price" is a situation in which

there is neither shortage nor surplus of goods.

What is meant by the statement "money is a medium of exchange"?

Money can be traded for goods and services

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Microeconomics

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Review of definitions and concepts in SSEMI1-4

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Questions 25

Answers

1
The Law of Supply states that
when the supply increases, the price of the product rises.
the supply of a product is not affected by its price.
when the supply decreases, the price of the product falls.
the quantity supplied will increase when the price increases
2
Where are price celings located on the graph?
below the equilibrium
on the side of the equilibrium
above the equilibrium
on the equilibrium
3
Where are price floors located on the graph?
on the equilibrium
above the equilibrium
on the side of the equilibrium
below the equilibrium
4
Which curve depicts the actions of consumers?
supply curve
demand curve
production possibility curve
trade-off curve
5
How many major components are there in the circular flow diagram?
3
2
1
4
6
Which market has no competition?
monopoly
pure competition
oligopoly
monopolistic competition
7
What is the main cause that people open their own business?
profit
demand
independence
tired
8
_______ have inelastic demand since a change in price would not change the quantity demanded.
Large supply of complements
Large supply of substitutes
Life necessities or needs
Luxuries
9
The MOST LIKELY incentive for entrepreneurs to start a new business is
to risk financial failure
to create a new social benefit
to make a profit
to discover a new patent
10
In the product market,
productive resources are bought and sold
a nation's total output of goods and services increases
producers sell goods and services to consumers
output produced by a given amount of inputs is measured
11
Price ceilings lead to
trade-offs
equilibrium
surpluses
shortages
12
Resource markets are LEAST LIKELY to sell
goods and services
labor and entrepreneurs
land
capital
13
Price floors lead to
scarcity
surpluses
equilibrium
shortages
14
Money that individuals receive from businesses return to businesses in
the payment for resources
the product market
the purchase of land
the factor market
15
What is used as a medium of exchange in the United States?
euros
bartering
money
food
16
If Columbia Tires and Pacific Tires control 75% of the tire market, what's the market structure
oligopoly
pure competition
monopoly
monopolistic competition
17
In economics, "equilibrium price" is a situation in which
the quantity demanded is greater than the quantity supplied.
the quantity supplied is greater than the quantity demanded.
a partial temporary reduction in prices occurs.
there is neither shortage nor surplus of goods.
18
A price set below the current market price is a characteristic of
price floor
regular price
equilibrium
price ceiling
19
The Law of Demand states that when the price of a good rises, the amount demanded does what?
falls
rises
fluctuates
remain constant
20
What two things are measured on both a supply and demand curve?
options
price and quantity
goods
services
21
Which curve depicts the actions of producers?
production possibility curve
demand curve
trade-off curve
supply curve
22
Money can be easily converted into goods or services. Which "function of money" in this?
commodity transfer
medium of exchange
store of value
measure of value
23
What is another name for the equilibrium price?
market clearing price
self clearing price
close-out price
money closing price
24
What is meant by the statement "money is a medium of exchange"?
Money is a measure of societal status.
Money is a measure of a product's value
Money can be acculumated as a form of wealth
Money can be traded for goods and services
25
Which market structure has the largest number of suppliers?
monopolistic competition
monopoly
perfect competition
oligopoly

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