G7 - Review Lesson 3

Multiple Choice

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?

• Prices or availability of substitutes

• Prices or availability of complementary goods

• Change in the weather or season

• Change in the number of buyers

Multiple Choice

What is the Equilibrium Price?

• 1

• 2

• 3

• 4

Multiple Choice

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

• There is a change in cost of production.

• The number of producers changes.

• The expectations of consumers changes.

• The output rate declines.

Multiple Choice

What is the Equilibrium Quantity?

• 50

• 60

• 70

• 80

Multiple Choice

Which of the following best refers to the market equilibrium price?

• 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.

Multiple Choice

Point at which supply and demand curve intersect each other

• price ceiling

• excess demand

• equilibrium

• disequilibrium

Multiple Choice

Mr Coyote goes to the ticket booth to buy tickets for a Spurs game. Mr. Coyote is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available?

• The arena forgot to print enough tickets.

• The supply of tickets was greater than the demand.

• The arena charged too much money for each ticket.

• The demand for tickets was greater than the supply.

Multiple Choice

Equilibrium price is the price at which the quantity of a product demanded by consumers and the quantity supplied by producers

• are different.
• are equal.
• is higher for the product demanded.
• is higher for the product supplied.

Multiple Choice

Which statement expresses a central idea of how the laws of supply and demand work?

• 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.

Multiple Choice

Define a shortage

• Where quantity demanded is less than quantity supplied

• Where quantity demanded is greater than quantity supplied

• Where quantity demanded is equal to quantity supplied

Multiple Choice

Which situation is most likely to lead to the lowest prices?

• 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.

Multiple Choice

Define a surplus

• Where quantity demanded is less than quantity supplied

• Where quantity demanded is greater than quantity supplied

• Where quantity demanded is equal to quantity supplied

Multiple Choice

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

• Consumers are able to buy goods for the best available price.
• People pay much higher prices for goods.
• There are frequent shortages of goods on the market.
• Producers refuse to sell some of their products.

Multiple Choice

If the current price is $800, which of the following would be the best description for the situation that exists in the market

• There is a shortage of 12 houses

• There is a shortage of 12000 houses

• There is a surplus of 12

• There is a surplus of 12000 houses

Multiple Choice

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

Multiple Choice

If the current price is $300, which of the following would be the best description for the situation that exists in the market

• There is a shortage of 18 houses

• There is a shortage of 18000 houses

• There is a surplus of 18

• There is a surplus of 18000 houses

Multiple Choice

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

• The demand for good X will increase.

• The market price of good X will decrease.

• The demand for good X will decrease.

• The demand for good X will not change.

Multiple Choice

What will happen if there is more supply in the market than there is a demand of the product?

• Shortage

• Surplus

• Equilibrium

Multiple Choice

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?

• It would decrease.

• It would increase.

• It would be unaffected.

• There is insufficient information given to answer the question.

Multiple Choice

What will happen if there is not enough supply in the market for a demand of the product?

• Equilibrium

• Surplus

• Shortage

Multiple Choice

A higher price for batteries would tend to

• increase the demand for flashlights.

• decrease the demand for electricity.

• increase the demand for electricity.

• increase the demand for batteries.

Multiple Choice

What is the state in which market supply and demand balance each other, and as a result prices become stable?

• Market Price

• Market Equilibrium

• Market Disequilibrium

Multiple Choice

What will happen in the rice market if buyers are expecting higher prices in the near future?

• The demand for rice will increase.

• The demand for rice will decrease.

• The demand for rice will be unaffected.

• The supply of rice will increase.

Multiple Choice

What is characterized by changes in conditions where supply and demand are out of balance?

• Market Price

• Market Disequilibrium

• Market Equilibrium

Multiple Choice

Refer to Graph 4-1. The movement from point A to point B on the graph shows

• a decrease in demand.

• an increase in demand.

• an increase in quantity demanded.

• a decrease in quantity demanded.

Multiple Choice

Price is currently above equilibrium. This will create excess__________. We would expect price to ___________.

• demand; increase

• demand; decrease

• supply; increase

• supply; decrease

Multiple Choice

What does the Latin phrase Ceteris paribus literally mean?

• "other things being equal."

• "after this therefore because of this."

• "to respond slowly to a change in price."

• "There's no such thing as a free lunch."

Multiple Choice

What happens to the market when the chocolate bars are priced at $4 each?

• surplus

• shortage

• equilibrium

Multiple Choice

What best refers to the situation when the price of a good or service changes?

• there is a movement along a stable demand curve.

• demand shifts in the opposite direction.

• demand shifts in the same direction.

• supply shifts in the opposite direction.

Multiple Choice

What happens to the market when the chocolate bars are priced at $1 each?

• shortage

• surplus

• equilibrium

Multiple Choice

Other things equal, when the price of a good rises, the quantity supplied of the good also rises. What best refers to this situation?

• The law of increasing costs.

• The law of diminishing returns.

• The law of supply.

• The law of demand

Multiple Choice

What is Production?

• Production is the act of creating an output, a good or service which has value and contributes to the utility of individuals.

• Production is an activity related to selling or the number of goods or services sold in a given time period.

• Production is the quantity of a good that consumers are willing and able to purchase at various prices during a given period of time.

• Production is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or directly to another agent in the marketplace.

Multiple Choice

Refer to Graph 4-4. On the graph, what could most likely cause the movement from S to S1?

• A decrease in the price of the good.

• An increase in income.

• An improvement in technology.

• An increase in input prices.

Multiple Choice

What is Demand?

• Demand is the act of creating an output, a good or service which has value and contributes to the utility of individuals.

• Demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given period of time.

• Demand is an activity related to selling or the number of goods or services sold in a given time period.

• Demand is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or directly to another agent in the marketplace.

Multiple Choice

Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?

• $7, 20.

• $7, 60.

• $5, 40.

• $3, 60.

Multiple Choice

Refer to Graph 4-5. According to the graph, What occurs at a price of $7?

• there would be a shortage of 40 units.

• there would be a surplus of 40 units.

• there would be a surplus of 20 units.

• the market would be in equilibrium.

Open Ended

What is the difference between "Demand" and "Quantity demanded"?

Multiple Choice

Refer to Table 4-2. In the table shown, what would be the result if the price were $8?

• a surplus of 30 units would exist and price would tend to fall.

• a surplus of 60 units would exist and price would tend to rise.

• a surplus of 60 units would exist and price would tend to fall.

• a shortage of 30 units would exist and price would tend to rise.

Multiple Choice

Regarding "demand", there's a direct relationship between "price" and "quantity demanded".

• True

• False

Multiple Choice

Regarding "supply", there's a direct relationship between "price" and "quantity supplied".

• True

• False

Open Ended

Provide and example explaining how "Price of resources" affects "supply".

Open Ended

Provide and example explaining how "Number of producers" affects "supply".

Multiple Choice

Regarding supply, what is surplus?

• When the quantity supplied is greater than the quantity demanded.

• When the quantity demanded is greater than the quantity supplied.