Unit 3 - The Price is Right Study Guide and Review

Front

How can the equilibrium price of a good or service be determined? Options: matching the columns in a supply schedule and a demand schedule, finding where the supply curve and the demand curve intersect, doing market research to determine the maximum price consumers will pay, moving the supply curve right or left until it matches the demand curve

Back

Finding where the supply curve and the demand curve intersect.

Front

Which of the following describes a situation in which the price of a good would rise? Producers cannot make enough of a good when that good becomes popular quickly., Production is increased in order to catch up with a sudden rise in demand., A new technology allows producers to increase supply very quickly., Consumers start using less of a good because more substitutes are available.

Back

Producers cannot make enough of a good when that good becomes popular quickly.

Front

Which of the following accurately describes a shortage? Consumer demand for a certain car is greater than the number of cars that can be produced.

Back

Consumer demand for a certain car is greater than the number of cars that can be produced.

Front

Which of the following occurs when someone buys a third winter coat? Options: diminishing marginal utility, efficient production, substitution, elasticity

Back

diminishing marginal utility

Front

Which of the following is a trait shared by all public goods? Options: ability to exclude people, elastic demand, rivalry among consumers

Back

free-rider problem

Front

Which of the following best describes why buying a home is an investment? Options: Mortgage interest rates are so low that it's better to invest money in a house than in the stock market, The interest rates on home loans are generally much lower than the interest rates on other loans., Housing prices can go up and down quickly in comparison to the overall inflation rate., When someone owns a home, s/he can generally sell it in the future for more than the original price.

Back

When someone owns a home, s/he can generally sell it in the future for more than the original price.

Front

Which of the following is one disadvantage of renting a place to live compared to buying a home? Options: Rent is generally more than monthly mortgage payments., The landlord covers the expenses of maintaining the property., Residents can't alter their living space without permission., Tenants have to pay for all repairs to the building.

Back

Residents can't alter their living space without permission.

Front

Which of the following tends to result in a decrease in the selling price of houses in an area? Options: increase in the population of the city or town, increase in the income of new residents in the city or town, increase in the labor costs of construction, increase in mortgage interest rates

Back

increase in mortgage interest rates

Front

Which of the following best explains the standard of living? Options: how much an average person can afford to buy, the rate of inflation for prices of normal goods, a measurement of tax levels, the set of rules for home ownership

Back

how much an average person can afford to buy

Front

Which of the following comes after a period of recession in the business cycle? a boom, recovery, stagflation, a drought

Back

recovery