Unit 3 Review

Thousands of people leave a small town due to a factory closing down. Sales at the local grocery store are reduced. What causes this change?

• Prices or availability of substitutes

• Prices or availability of complementary goods

• Change in the weather or season

• Change in the number of buyers

New technology advances the rate at which furniture can be assembled. Why does this change the supply?

• There is a change in cost of production.

• The number of producers changes.

• The expectations of consumers changes.

• The output rate declines.

Which of the following best refers to the market equilibrium price?

• Surpluses depress the number of goods supplied.

• Shortages and surpluses will have no effect on the market.

• The government will not intervene in the market.

• The quantity demanded is the same as the quantity supplied.

Mr Coyote goes to the ticket booth to buy tickets for a Spurs game. Mr. Coyote is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available?

• The arena forgot to print enough tickets.

• The supply of tickets was greater than the demand.

• The arena charged too much money for each ticket.

• The demand for tickets was greater than the supply.

Which statement expresses a central idea of how the laws of supply and demand work?

• The government sets the prices for goods and services.

• Prices are determined by the interaction of producers and consumers.

• Consumers alone determine the prices for goods and services.

• Technology dictates the prices charged for goods and services.

Which situation is most likely to lead to the lowest prices?

• There is only one producer making the good.
• Businesses secretly agree to share their profits.
• Competition between businesses is prohibited.
• Several producers compete to sell goods to the public.

Which situation is most likely to lead to the lowest prices?

• There is only one producer making the good.
• Businesses secretly agree to share their profits.
• Competition between businesses is prohibited.
• Several producers compete to sell goods to the public.

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

A change in the price of a good causes people to buy more or less of an item. This best describes the concept of

• the demand curve

• change in quantity demanded

• change in demand

• elasticity

The quantity demanded of a good or service changes at all price levels best describes the concept of

• change in quantity demanded

• elasticity

• change in demand

• demand curve