Microeconomics 7

Whenever a company develops a new product, an equilibrium price and quantity will eventually be determined by

• the government in their role as price setter

• the interaction of sellers and producers

• the interaction of buyers and sellers

• how much money is available in the economy

Another name for the factor market

• the capital market

• the resource market

• the product market

• the unfinished goods market

Company X sells a good where there is a lot of competition. Companies enter and leave the market often. Company X stays in business because they constantly use advertising to make their product seem different in which market structure does Company X operate?

• Monopolistic Competition

• Oligopoly

• Monopoly

• Pure Competition

The graph above shows how a change in equilibrium price and quantity can result from

• an increase in price

• an increase in supply

• a decrease in supply

• a decrease in demand

Which describes what has happened in the graph above?

• An increase in demand has caused a decrease in equilibrium price.

• Supply has decreased, causing an increase in equilibrium price.

• Demand has increased causing an increase in equilibrium quantity

• The increase in supply has caused an increase in equilibrium quantity

Assume company 1 and company 2 operate as an oligopoly. Which statement BEST represents this?

• They are major corporations with stockholders

• they control over 75% of the market

• They have products that are different, but are marketed the same way

• They own many different "brands"

Prices set to high in a market will lead to which situation?

• Shortage

• Surplus

• Stability

• stagflation

The change seen in the graph would have been caused by

• an increase in the number of consumers

• a decrease in the price of productive resources

• an increase in business taxes and regulation

• a decrease in technology

According to the law of Demand, if the price of an item increases, which effect is most likely to happen?

• The quantity demanded will increase

• The quantity demanded will decrease

• The demand curve shifts to the left

• The supply curve will shift to the left

A key advantage of a partnership is

• unlimited liability for partners

• Specialization of the partners

• ease of raising capital through stockholders

• limited liability of the partners