Econ Unit 2 Review

 The term “product” refers to

• wants and needs. 
• supply and demand.
• 'yo mama
  
• goods and services. 

What is the economic reason that individuals and groups make choices? 

• People cannot rely on the government
• Scarcity
• Opportunity cost
• to make plans to securetheir economic future. 

Opportunity cost is defined as the

• amount of money spent per item.
  
• value of all possible choices.
•  value of the best alternative not chosen. 
• difference between the benefits and costs of choices. 

According to the law of supply, if price goes up, producers will

• close down their production facilities.
• be more willing to provide product.
  
• charge less for their goods and services.
• lay off workers and produce less.
  

Why might the demand for a product be price elastic

• The item has a number of close substitutes
• The item is relatively inexpensive.
• The item is a necessity for survival.
• The item is something needed immediately. 

Which item below will tend to have a greater price elasticity?

• oreo cookies
• medicine 
• drugs
• gas

What might encourage a company to produce its product at a greater quantity? 

• demand decreases
  
• international competition
• wage and salary increases
• price increases 

What happens to price and quantity if  consumers’ incomes decline? 

• Price goes up, quantity goes up
• Price goes down, quantity goes down
• Price goes up, quantity goes down
• Price goes down, quantity goes up

If the price of natural resources falls, the supply of products that use these resources will

• increase
• decrease 
• vary
• not change

Strawberry farms are anexample of which type of market structure?

• oligopoly
  
• geographic monopoly 
• perfect competition 
  
• monopolistic competition