Economics Unit 2 Pre-Test (Understanding Markets & Trade)

In a market economy, what determines the price and quantity of most goods produced?

• substitute goods

• supply and demand

• economic policies

• quality of goods

In a market economy, when consumers and producers act in their own self-interest, which is most likely to be the overall result?

• The market will have less variety and fewer products will be made

• The consumer will pay excessively high prices for goods and services

• The producers are likely to earn a profit making products people want

• The individuals or businesses will lose money no matter what they sell

What is the most likely to happen when consumers want to buy more scooters than the store has available for sale?

• Profit on scooter sales will be smaller

• Price of the scooter will increase

• Manufacturers will stop making it

• Stores will make a different model

Assume the government subsidizes the production of a good every year. Which of these would be the most likely result if that government stopped the subsidies?

• Increase in the number of producers

• Better selection of products

• Increase in the price of products

• Better wages for workers

On a supply and demand graph, what is the point called at which quantity demanded equals quantity supplied?

• Surplus

• Equilibrium

• Shortage

• Equidistant

Sugar is an important input in the production of cookies. If the price of sugar decreases, what would we expect to happen to the supply of cookies?

• No change

• Increases

• Decreases

• Disappears

Which of the following is the best example of the law of supply?

• A sandwich shop increases the number of sandwiches when the price increases.

• A supplier provides more shoes to local stores as price of ladies shoes fall.

• A catering company buys a new dishwasher to make employees' work easier.

• A milling company builds a new factory to process flour to export.

A hurricane hit Florida and destroyed half of the orange crop. What would most likely happen to the orange market?

• Demand for oranges will rise

• The price of oranges will fall

• The price of oranges will increase

• Supply of oranges will increase

How many businesses make up an oligopoly?

• A Few

• None

• One

• Most

Which of the following describes a market in which one firm controls the supply and pricing of a good or service?

• Monopolistic Competition

• Oligopoly

• Perfect Competition

• Monopoly