Economics - Study questions for Unit 2 Test

In which market structure does a business have a lot of price control, but not complete control?

• monopolistic competition

• perfect competition

• oligopoly

• monopoly

All of the following can change the demand curve EXCEPT:

• a change in consumer opinion about the product

• the number of consumers buying the product

• the expectation that prices are about to increase

• the cost of capital equipment to make the product

If an increase in the price of Product A causes a increase in the demand for Product B, then the products are:

• Substitute goods

• Complimentary goods

• Unrelated/independent

• none of these answers is correct

If the government were to set the price floor at $16 for this market for movies, what would happen?

• there would be a shortage of 400 movie tickets

• there would be a surplus of 400 movie tickets

• the supply would shift to the left

• the equilibrium price would increase

David and Marcus decided to open a restaurant. They borrowed some money from an investor, as well as a business loan from a local credit union. They hired two managers, two servers, rented out a space at a plaza, and bought ovens, stoves, and kitchen equipment. What is an advantage of David's & Marcus' type of business?

• profits must be shared

• specialization in running the business

• disagreements between owners

• unlimited liability

Of the following, which situation would cause the shift of the supply curve from S1 to S2?

• Tractors become cheaper to purchase

• The government increases business taxes for wheat farmers

• A hurricane destroys several wheat farms in the South

• New laws create stronger regulations on how wheat is harvested

Using the graph, which of the following would cause the equilibrium price to move to $16?

• the producers’ expectations about the future becomes more positive

• the consumers’ expectation about the future becomes more negative

• the number of producers in the market decreases

• higher subsidies for companies producing movies

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

• An decrease in productivity

• Less sellers in the marketplace

• A decrease in government regulations

• An increase in the cost of raw materials

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

• A surplus of the product

• An increase in the price of a substitute product

• A decrease in the price of a complementary product

• A decrease in the general income of the region

Suppose that the government set the price of chocolate at $4 per pound. Which of the following statements best describes an effect of this price control?

• There would be a shortage of 40 pounds of chocolate

• Less chocolate would be supplied at $6 than at $4

• Producers of chocolate would want the price set at $2

• There would be a surplus of 20 pounds of chocolate