AP micro test

Consumers will buy more of a good when its price is lower and less when its price is higher.

• Law of Demand

• Law of Supply

• Price Floor

• Price Ceiling

The point at which the quantity demanded for a product or service is equal to the quantity supplied of that product or service.

• Equilibrium

• Price Stability

• Shortage

• Supply

A minimum price consumers are required to pay for a good or service.

• Price Ceiling

• Market Clearing Price

• Equilibrium

• Price Floor

A maximum price consumers are required to pay for a good or service.

• Price Ceiling

• Equilibrium

• Market Clearing Price

• Price Floor

A market in which a single seller dominates.

• Monopolistic Competition

• Monopoly

• Oligopoly

• Perfect Competition

A market structure in which a large number of firms all produce the same product and no single seller controls supply or prices.

• Monopoly

• Monopolistic Comeptition

• Oligopoly

• Perfect Competition

An increase in the price of milk causes a decrease in the demand for cereal. The two products are

• substitutes
• complements
• unrelated
• demand elastic

Rent payments and property taxes would be counted as

• total cost
• variable costs
• fixed costs
• marginal costs

Profits will be maximized when marginal revenue

• is double marginal cost
• equals marginal cost
• is one-half marginal cost
• exceeds marginal cost

What is the Profit Maximizing Formula?

• Revenue > Expenses

• MR > ATC

• MR = MC

• AFC + AVC = ATC