Unit 2 Overview

A luxury yacht is an example of____

• Substitute

• Complement

• Inferior Good

• Normal Good

A _____ is a government payment to producers that increases supply.

• Price Ceiling

• Subsidy

• Tax

• Price Floor

The ______ says that there is an INVERSE relationship between price and quantity in a market (when price goes UP, Quantity goes DOWN)

• Law of supply

• Equilibrium

• Surplus

• Law of Demand

If the number of consumers increased, what would happen to demand?

• Nothing

• Increase

• Decrease

• Movement along the curve

What will happen in the market when a tax is placed on producers?

• Supply will increase

• Demand will increase

• Supply will decrease

• Demand will decrease

CAN A CHANGE IN PRICE OF A PRODUCT SHIFT A DEMAND/SUPPLY CURVE?

• NO, NEVER!!!! (if you pick this answer you’re a genius)

• Yes (please don’t pick this answer)

Which of the following would cause a shift in supply?

• Change in price

• Technology

• Number of consumers or buyers

• Equilibrium

_______ are goods that can be used in place of one another. Example: Coke and Pepsi

• Complements

• Substitutes

• Taxes

• Subsidies

Chips and Queso are known as...

• Normal goods

• Complements

• Appetizer

• Substitutes

Which of the following would cause an increase in Demand?

• a good going out of style

• Population decreasing

• The substitute going down in price

• a good becoming popular