Econ Unit 2-Micro Review

The new oven in Mr. Brown's bakery allows him to produce bread more efficiently and more cheaply. What is the MOST LIKELY effect?

• the price drops and the quantity demanded increases

• the price drops and the quantity demanded decreases

• the price rises and the quantity demanded decreases

• the price rises and the quantity demanded increases

In a market economy, a high price will usually cause

• producers to supply more and consumers to buy less.

• producers to offer less and consumers to buy less.

• producers to offer less and consumers to buy more.

• producers to supply more and consumers to buy more.

The Law of Supply states that

• the quantity supplied of a product will increase when the price of that product increases.

• the supply of a product is not affected by its price.

• 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.

In the graph, the equilibrium price is approximately

• $3.00

• $1.00

• $5.00

• $6.00

Which market structure has the largest number of suppliers?

• perfect competition

• monopoly

• oligopoly

• monopolistic competition

A price set below the current market price is a characteristic of a

• price ceiling.

• price floor.

• regular price.

• equilibrium price.

The "market clearing price" is most closely associated with

• the equilibrium price.

• the price index.

• the price level.

• the price ceiling.

Money that individuals receive from businesses return to businesses in

• the product markets.

• the factor markets.

• the purchase of land.

• the payment for resources.

Before money was invented, how were goods and services exchanged?

• Merchants and customers bartered.

• Kings evenly distributed items.

• Individuals were self-sufficient.

• Priests evenly distributed items.

What is the relationship between quantity supplied and price?

• They are directly related.

• They are not related.

• They are inversely related.

• They are related through demand.