Economics Review

Is there a thing called "The Law of Demand"?

• True

• False

What is supply?

• The amount of goods available

• The increase in output that arises from an additional unit of input

• The cost of producing one more unit of a good

• The financial gain made in a transaction

Which one is the definition for shortage?

• A situation in which quantity supplied is greater than quantity demanded.

• A situation in which quantity demanded is greater than quantity supplied.

Which of the following could cause the price for automobiles to decrease?

• The local factory gives a big raise to its employees.

• People get an extra tax refund of $5,000

• A brand new automobile dealership opens in town.

• The price of gasoline falls.

In a market economy, who decides on the prices of goods and services?

• government
• buyers and sellers
• firms
• local leaders

Generally speaking, the lower the price, the greater the quantity demand.

• True
• False

For the law of demand, as price rises, what happens to quantity demanded?

• it goes up
• it goes down
• it stays the same
• it is not effected

Does this person provide a good or a service?

• goods
• service

Does this picture show needs or wants?

• need

• want

What is a service?

• A want

• Something you buy from the store

• A need

• A job a person performs for someone else