Unit 2 Econ Test Review

·       Better location

·       More convenient hours

·       Well trained and polite staff

What type of market structure do the practices above best identify?

                                                  

• monopolistic competition

• oligopoly   

• monopoly

• pure competition

What would cause a shift in demand from D3 to D2?

• The income of a household increasing

• The expectation of a shortage

• The decrease in popularity of a product

• The price of a related good decreases

3.       In the circular flow model, what is represented by #4?

• Goods and Services

• Taxes

• Wages/Income

• Productive Resources

What do households give businesses/firms in exchange for wages/income?

• Productive Resources (CELL)

• Expenditures

• Goods and Services

• Taxes

According to the Law of Demand, a decrease in price causes a ______________.

• Increase in Quantity Demanded

• Decrease in Quantity Demanded

• Increase in Quantity Supplied

• Decrease in Quantity Supplied

What is the market price and quantity for chocolate bars?

• $1.60;200

• $0.80;400

• $1.20;300

• $2.00; 600

What causes a Surplus?

• quantity supplied is greater than quantity demanded (above equilibrium)

• uquantity supplied is less than quantity demanded (below equilibrium) QD>QS or QS<QD

What causes a Shortage?

• uquantity supplied is greater than quantity demanded (above equilibrium) QS>QD or QD<QS

• quantity supplied is less than quantity demanded (below equilibrium) QD>QS or QS<QD

What is a price ceiling?

• The highest supply a firm can produce

• Minimum legal price that can be charged for  a product

• Maximum legal price that can be charged for a product

• The highest price that a consumer will pay for a product

What is a Price Floor?

• The minimum supply a business is willing to produce

• The minimum price a costumer is willing to pay

• Maximum legal price that can be charged for  a product

• Minimum legal price that can be charged for  a product