Unit 2 TEST REVIEW

Recently the price of a popular perfume has increased by $10. How will the price change likely affect the quantity demanded and supplied in the short run?

• Supply will stay the same, and quantity demanded will increase.

• Quantity supplied will decrease, and quantity demanded will increase.

• Quantity supplied will increase, and quantity demanded will decrease.

• Quantity supplied will increase, and demand will stay the same.

A fashion brand is under boycotts from consumer following controversy regarding fraud in the owners family.

This scenario is an example of how a shift in demand can be created by -

• substitutes

• customer income

• Customer taste or preference

• Expectation of future prices or availability

Which of the following is determinant of demand?

• Taxes

• Number of sellers

• Product availability

• Consumer preferences

On a supply and demand graph, supply will increase if --

• There are fewer businesses in the industry. 

• The number of businesses in the industry increases.

• Prices decrease. 

• Production taxes decline over a short period of time. 

Which of the following would most likely cause the equilibrium price in the cell phone market?

• The cost of parts for cell phones has gone up.

• The cell phone company made a large profit this year.

• Cell phone salesmen are working overtime to sell phones.

• The supply for cell phones has met demand for cell phones

Which non-price determinate is sometimes utilized by the government to protect free competition?

• Anti trust laws

• 
  Rationing Laws 

• Excise tariffs 

• Consumer boycotts

Which of the following conditions could explain a decrease in demand ?

• Farmers harvested a bumper crop of tomatoes.

• Shoppers learned that cans of cooked tomatoes are spoiled.

• Surveys found that people are eating more cooked tomatoes.

• Eating cooked tomatoes was found to have more health benefits.

With a given amount of resources, a country with a comparative advantage will produce a product with

• lower opportunity costs

• cheaper natural resources

• higher quality specifications

• higher unemployment

Which of the following accounts for why countries specialize in particular trade products?

• Government regulations

• Variation in the size of markets

• Unequal distribution of resources

• Variety in the types of economic systems

One way the United States could increase exports of sports cars would be to

• negotiate to lower tariffs on sports cars

• reduce gasoline taxes in the United States

• increase the exchange rate of the American dollar

• raise the prices of sports cars in the United States