Unit 2 Test Study Guide 2020/ 2021

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 _____ curve represents buyers in a market.

• supply

• demand

The interaction of supply and demand are called______.

• Concepts

• Guesses

• Theories

• Laws

What is a shifter of demand (that makes the curve shift to the right or left)?

• A decrease in price of the good

• A change in the price of a resource

• A change in price of a related good

• An increase in price of the good

What is a shifter of Supply?

• a change in the price of a related good

• An increase in the price of a good

• A decrease in the price of a good

• a change in the cost of the resources that are used to produce the good

The equilibrium price is when _____.

• Quantity supplied and quantity demanded are equal

• Quantity supplied is greater than quantity demanded

• Quantity demanded is greater than quantity supplied

What is the Law of Diminishing Marginal Utility?

• Making decisions based on the benefits and the costs

• You get decreasing additional usefulness from a product with

  each unit you consume.

• If price increases, then quantity demanded decreases.

What happens to the curve when there is an increase in demand?

• It shifts left.

• It shifts right.

• It does not move, but the point moves up the curve.

• It does not move, but the point moves down the curve.