Microeconomics 1

According to the laws of supply and demand, a decrease in demand will cause prices to:

• Increase
• Decrease
• Stay The Same
• Equalize

Law of Supply states 

• the supply of a product is not affected by its price
• the quantity supplied of a product will increase when the price of the product increases
• when the supply of a product decreases, the price of the product falls
• when the supply of a product increases, the price of the product rises

__________study of how people (including companies/countries) make choices on buying, selling, using, and distributing goods/services.

• Economics
• Consumer Science
• Opportunity Costs

Basic Economic Problem: Mismatch of unlimited wants and needs and unlimited economic resources.

• 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

At which price is equilibrium?

• $1.00
• $1.25
• $1.50
• $1.75

If, in a market, a particular store notices a lot of merchandise piling up on the shelves and in the stock room, how could they encourage existing buyers to buy the goods?

• lower the prices as an incentive to purchase more

• produce less to promote scarcity

• raise prices to make the goods appear higher in quality

• begin producing different products

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

• stagflation

• stability

• surplus

• shortage

A market structure in which there is only one seller is known as a

• oligopoly

• monopolistic competition

• monopoly

• pure competition

In the graph, what might explain the movement of the demand curve from D₁ to D₃?

• a surplus of the product

• a decrease in the general income of the region

• a decrease in the price of a substitute product

• a decrease in the price of a complementary product