Unit 2 Review

Referring to the diagram above, what is the most likely explanation for a decrease in households’ purchases of products?

• Decrease in the income that Households gain from the Factor Market

• Increase in the revenue that Households gain from the Product Market

• Decrease in the resources that Business gain from the Factor Market

• Increase in the revenue that Businesses gain from the Product Market

Referring to the graph above, what will happen when the supply curve shifts to the right?

• Prices will increase

• Prices will decrease

• “Pe” will remain constant

• "Qe” will remain constant.

If the price of leather rises, what is likely to occur?

• The supply of shoes will increase.

• The supply of shoes will decrease.

• More producers will sell shoes.

• More consumers will purchase shoes

If tea is considered a substitute good for coffee, what is likely to occur if the price of tea decreases?

• Equilibrium price for coffee will increase

• Equilibrium price for coffee will decrease

• Demand for coffee will increase

• Demand for tea will decrease

If the equilibrium price for a 3-pound bag of oranges is $4.00, what will occur if a price ceiling is established at $3.00?

• Quantity demanded will exceed quantity supplied

• Quantity supplied will exceed quantity demanded

• A price floor will be established at $3.00

• A price floor will be established at $4.00

Most countries do not possess large amounts of lithium, the chemical element that is mined from the Earth and commonly used for electric-vehicle batteries. If scientists discovered that lithium was found in banana peels, what would likely occur to the marketplace for electric-vehicle batteries?

• The biggest battery-producing companies would develop an oligopoly

• The biggest battery-producing company would develop a monopoly

• More companies would begin to produce batteries

• Fewer consumers would buy batteries

As illustrated in the graph above, consumer demand for alternatives to beef has increased in recent years. What will the effect of this increased demand be?

• Equilibrium quantity will decrease

• Equilibrium quantity will increase

• Equilibrium price will remain constant

• Equilibrium price will decrease

If Georgia experiences an extended period of unusually harsh winter weather, what will happen to the price of peaches and pecans?

• Quantity demanded will decrease

• Quantity supplied will increase

• Prices will increase.

• Prices will decrease

Identify at least three determinants of supply