Microeconomics IA3 Review

Which statement is true about the circular flow diagram?

• A  Households are demanders in the product market and suppliers in the factor market
• A  Business are demanders in the product market and suppliers in the factor market.
• A  Households are demanders in the factor market and suppliers in the product market.
•  A  Businesses and households are not components of the circular flow diagram.

Goods and services are sold in the ___ market

• Factor

• Product

• Illegal

• Black

The Law of Supply states:

• as price increases, supply increases
• as prices decrease, supply increases

What causes a change in quantity demanded?

• A change in consumer income

• A change in production possibilities

• A change in the number of sellers

• A change in price

This image best represents:

• An increase in demand

• A decrease in demand

• A decrease in quantity demanded

• An increase in quantity demanded

This graph represents a(n):

• Increase in demand

• Decrease in demand

• Increase in quantity demanded

• Decrease in quantity demanded

The movement seen in this curve would best be described as:

• An increase in price led to a decrease in demand

• An increase in price led to a decrease in quantity demanded

• A decrease in price led to an increase in demand

• A decrease in price led to an increase in quantity demanded

The market clearing price is

• $ 12.00

• $ 3.00

• $ 6.00

• $ 9.00

When the price of hot dogs decreases and the demand for hot dog buns increases, this explains the demand of

• Complementary goods

• Capital Goods

• Substitute Goods

• Consumer Goods

Which of the following best describes an oligopoly?

• many monopolistically competitive firms

• a few firms sharing monopoly power

• a former monopoly that has been broken up by the government

• a government-granted franchise or monopoly