Unit 2 Economics - Demand, Supply, and Market Structures

When the price of something increases, the quantity demanded

• Increases

• Decreases

• Remains unchanged

• Remains unchanged

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?

• a complement

• diminishing marginal utility

• unit elasticity

• the substitution effect

​On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___

• a change in price.

• an increase in demand.

• a decrease in demand.

• a change in demand.

Which would an economist consider a likely substitute for coffee?

• water

• tea

• chicken

• donuts

Which of these describes an effect of increased government regulation on producers?

• It shifts their market supply curve to the right.

• It shifts their market supply curve to the left.

• It prompts them to increase output at all possible prices.

• It encourages production by requiring the use of new technology.

Which of these results from the repeal (stopping) of an item’s subsidies?

• a decrease in the price of that item

• a leftward shift of that item’s supply curve

• a rightward shift of that item’s supply curve

• an increase in reliance upon government regulation

Equilibrium is reached when what occurs?

• price increases

• there is no change in the quantity supplied

• quantity supplied equals quantity demanded

• prices are inelastic

Which is the opposite of a surplus?​

• inelastic

• equilibrium

• floor

• shortage

What do price ceilings and price floors prevent?​

• shortages

• surpluses

• prices reaching equilibrium

• benefits to consumers

It is a market structure characterized by large number of well-informed independent buyers and sellers who exchange identical products

• Perfect (Pure) Competition

• Monopolistic Competition

• Oligopoly

• Monopoly