Unit 2 Test Study Guide 2022/23

When there is a surplus of a good or service in the market prices will _____.

• increase

• decrease

• remain the same

According to the Law of Demand, what type of relationship does the price of a product have to the quantity demanded of that product?

• inverse

• direct

• neutral

How does an improvement in technology affect supply of a good?

• increases

• decreases

• no change

The interaction of supply and demand are called______.

• Concepts

• Guesses

• Theories

• Laws

What is it called when the quantity supplied of a product equals the quantity demanded by consumers?

• surplus

• disequlibrium

• shortage

• equlibrium

There is a _____ relationship between price and quantity supplied in the Law of Supply.

• inverse (if price increases, then quantity supplied decreases)

• neutral (if price increases, then nothing happens to quantity supplied)

• direct (if price increases, then quantity supplied increases)

What is something that cannot happen in a market?

• Supply and demand will never change

• Demand can increase

• Supply can increase

• Supply can decrease

What will happen to the supply of a good if the price of that good

increases.

• Supply will increase

• Supply will decrease

• Supply will not change

What will happen to the price of a good or service if there is not enough to meet consumer demand for it?

• The price will go down

• The price will go up

• The price will not change

Why do fruits and vegetables have an elastic demand?

• Because they are important to people and the government regulates the market

• Because not all people like fruits and vegetables

• Because there are many different types of fruits and vegetables

• Because there are many vegetarians