Microeconomics 6

According to the law of demand, if the price of a good rises, the quantity demanded will_______, and when the price of the good falls, the quantity demanded will _______.

• rises, rises

• falls, rises

• falls, falls

• rises, falls

According to this diagram showing the circular flow of goods and resources, where do individuals spend the income they earn?

• in the factor market

• in the capital market

• in the product market

• in individual households

In which type of business organization do the owners have the least input and decision-making on the day to day operations?

• Monopoly

• Corporation

• Partnership

• Sole Proprietorship

What would be the situation if we moved the price from $600 to $400

• the price would be raised

• the price would be to high

• There would be a surplus

• There would be a shortage

Which factor might cause an increase in the supply of a product?

• a decrease in productivity

• fewer sellers in the market place

• the introduction of new technology

• an increase of raw materials

· firms produce and sell identical products

· firms have a relatively small market share

· consumers are aware of the products and their prices

· there are few barriers to entry into the market

All of these are describing what type of market structure?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

How might a minimum wage law impact the supply and demand of workers?

• It might result in a surplus of supply

• it might result in a shortage of supply

• It might result is lower wages for workers

• It might result in lower unemployment rates

Looking at the graph, if there is an increase in income for the households in this market, what is the MOST LIKELY result?

• The equilibrium price will fall.

• The demand curve will shift to the left.

• The demand curve will shift to the right.

• The supply curve will become a vertical line.

If OPEC decided to cut oil production for the coming year, what would be the MOST LIKELY effect?

• prices would not change

• oil prices would probably rise

• oil prices would probably decline

• the price for substitute products would decline

Mr. Simpson is liable for all the debts of his company. Mr. Simpson has which type of business organization?

• Monopoly

• Corporation

• Conglomerate

• Sole Proprietorship