Supply;Demand;Trade;Market Structure

Free trade agreement negotiations between the United States and Australia concluded in February 2004. Since the agreement went into force in January 2005, the U.S.-Australia Free Trade Agreement has stimulated a 104% increase in the U.S. trade surplus with Australia. In 2013, the United States exported $26.1 billion in goods and imported $9.2 billion in Australian products.

—“Benefits of Free Trade Agreements,” U.S. State Department, http://www.state.gov (accessed July 24, 2014)

According to the authors of the excerpt, free trade has benefited the

United States because it —

• improved the relationship between the United States and Australia

• allowed both countries to experience increased economic growth

• resulted in a surplus of exports from the United States to Australia

Which of the following conditions could explain the shift in the demand

curve shown on the graph?

• Shoppers learned that cans of cooked tomatoes are spoiled.

• Farmers harvested a bumper crop of tomatoes

• Surveys found that people are eating more cooked tomatoes

Which of the following would most likely cause the shift shown on the

graph?

• A new, popular model of cell phone just came on the market

• The cost of parts for cell phones has gone up

• The cell phone company made a large profit this year

Based on the information in the graph, what is the equilibrium price of pizza?

• $4.00

• $2.00

• $3.00

-One seller

-Complete barriers to market entry

-No product differentiation

Which of the following is described by the characteristics listed in the

box?

• Monopoly

• Pure competition

• Monopolistic competition

-Few sellers

-Some control over price

-High market entry barriers Some product differentiation

What type of market structure is described by the information in the

box?

• Pure competition

• Oligopoly

• Monopolistic competition

Recently the price of a popular perfume has increased by $10. How will

the price change likely affect the quantity demanded and supplied?

• The supply will decrease and the demand will increase

• The supply will increase and the demand will stay the same

• The supply will increase and the demand will decrease

XYZ Corporation decided to expand their plant knowing that it would create pollution. XYZ also knew that it would take at least a year for the government regulators to realize the extent of the pollution. In that year's time, the corporation could make a lot of profit and they were willing to take the risk. XYZ, however, did not realize the extent to

which the community would resent the pollution and boycott products made in the new plant. XYZ lost so much money that it almost went into bankruptcy.

Which of the following would be the result of the scenario above?

• Non-price determinant of demand

• The concept of competition

• The concept of laissez-faire

Which of the following is a non-price determinant of demand?

• Consumer preferences

• Productivity

• Price ceiling

On a supply and demand graph, supply will decrease and shift to the left

when which of the following happens?

• The number of firms leaving the industry increases

• There are fewer government regulations in place

• The total cost of inputs decreases