Microeconomics Review

A market structure in which only one producer supplies a good that is in demand, thereby permitting them to set the price by how much they supply, is called

• competition.

• monopoly.

• oligopoly.

• conglomerate.

A breakthrough in nanotechnology allows silicon chips for computers to be produced much more quickly and cheaply. If demand for computers remains unchanged, what will be the effect upon market price and supply?

• Both price and supply will rise.

• Both price and supply will fall.

• The supply will rise while the price falls.

• The supply will fall while the price rises.

The price at which total supply equals total demand is known as

• the middle price.

• the consumer price.

• consumer demand.

• the equilibrium price.

An industry that is dominated by a few large firms is

• monopolistic

• monopolistically competitive

• oligopolistic

• perfectly competitive

Even though Bonnie can buy her favorite apple pie at the grocery store for a third of the price, she insists at buying it at a country store. She insists the pies are better and willingly pays the extra money. Thus, the country store sells apple pies for more than the average price. This is largely due to?

• the market equilibrium price for apple pies

• change in quantity demanded

• price controls

• economic impact of consumer taste

In this supply & demand schedule, what would happen if the price of the socks was set at $2.50 a pair?

• All socks would sell because it would be the equilibrium price.

• a shortage.

• a surplus.

• No socks would be produced because it would be the equilibrium price.

What would happen if producers raised the price to $3.50 a pair?

• The socks would be priced at the equilibrium price.

• No one would buy socks because they are priced too high.

• a surplus.

• a shortage.

In a perfect market economy, for what price will the socks be sold?

• $1.50

• $2.00

• $3.00

• $4.50

This graph indicates an increase in __________.

• Supply

• Demand

Equilibrium is the point where supply meets _________.