ECON CFA #2 Practice/Warm-Up MASTER

1. The specific quantity of a good that sellers are willing and able to sell at a given price is the

• shortage supply
• surplus supply
• quantity bought
• quantity supplied

2. The supply price is any price:

• below the supply curve

• on the supply curve

• about the supply curve

• what is a supply curve

3. A supply curve shifts because:

• the price has changed

• a determinate of supply has changed

• a determinate of demand has changed

• the quantity supplied has changed

4. A decrease in supply can be caused by:

• a decrease in resource price

• an increase in the number of sellers in the market

• suppliers expectations of higher prices in the future

• an advancement in the technology for producing the good

5. In a market economy, the supply of a product and the demand for that product interact to determine the products:

• elasticity
• quantity
• equilibrium price
• benefits

6. What is the main reason the government sets up a price ceiling?

• to stimulate job growth
• to protect consumers
• to encourage production
• to break up monopolies

7. Which MUST be present to create increased demand for a product?

• there must be a large selection of substitute goods
• buyers must be both willing and able to purchase it
• an unlimited quantity of the product must be available
• producers must use the highest quality materials

8. According to the law of demand, people are MOST likely to choose a substitute instead of their usual product when the substitute

• is sold in larger sizes
• has brighter packaging
• is less expensive
• becomes less avaialable

9. Which of these is MOST LIKELY to act as an incentive that increases demand for fuel-efficient cars

• a rise in unemployment
• a strike by the auto workers' unions
• a new law that raises the speed limit
• a sharp rise in the price of gasoline

10. Demand for a product is most likely to DECREASE if the manufacturer does which of the following?

• puts the product on sale
• raises the price
• improves the design
• advertises on television