Unit 2 Microeconomics Review

Front

Thousands of people leave a small town due to a factory closing down. Sales at the local grocery store are reduced. What causes this change?

Back

Change in the number of buyers

Front

New technology advances the rate at which furniture can be assembled. Why does this change the supply?

Back

There is a change in cost of production.

Front

Which of the following best refers to the market equilibrium price? Options: Surpluses depress the number of goods supplied., Shortages and surpluses will have no effect on the market., The government will not intervene in the market., The quantity demanded is the same as the quantity supplied.

Back

The quantity demanded is the same as the quantity supplied.

Front

Why are there no basketball tickets available for the Spurs game?

Back

The demand for tickets was greater than the supply.

Front

Which statement expresses a central idea of how the laws of supply and demand work? Options: The government sets the prices for goods and services., Prices are determined by the interaction of producers and consumers., Consumers alone determine the prices for goods and services., Technology dictates the prices charged for goods and services.

Back

Prices are determined by the interaction of producers and consumers.

Front

Which situation is most likely to lead to the lowest prices? Options: There is only one producer making the good., Businesses secretly agree to share their profits., Competition between businesses is prohibited., Several producers compete to sell goods to the public.

Back

Several producers compete to sell goods to the public.

Front

When companies compete in a market economy, what is usually the result?

Back

Consumers are able to buy goods for the best available price.

Front

Which of the following would NOT be a determinant of demand? The price of related goods, Income, Tastes, The prices of the inputs used to produce the good

Back

The prices of the inputs used to produce the good

Front

If the price of a substitute to good X increases, then

Back

The demand for good X will increase.

Front

Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

Back

It would decrease.