Economics Week 5 Quiz

Match the different competition types to the example. Oligopoly, Monopolistic Competition, Pure Competition

• Oligopoly - Smartphone industry/ telecommunications, Monopolistic Competition - Fast food/ Retail industry, Pure Competition - Agricultural products market

• Monopolistic Competition - Healthcare industry
• Oligopoly - Clothing industry

At the beginning of a sickness, the price of paper towels skyrocketed. Using supply and demand tell me why the price rose.

• Decrease in demand and increase in supply
• No change in demand and supply
• Increase in demand and decrease in supply

Which non-price determinate is sometimes utilized by the government to decrease demand for a product that is viewed as harmful to society?

• Consumer boycotts

• Excise taxes

• Rationing

Based on the information in the excerpt, what economic policy distinguishes Sweden's free market economy from that of the United States?

• High levels of administrative inefficiency

• No citizen feedback

• Privatization of the social welfare system and Government funding of education and health care

How does international trade impact economic growth within a trading nation?

• International trade allows industries within a trading nation to increase market power without losing customers.

• International trade allows a trading nation to limit opportunity costs, making the market more efficient.

• International trade shifts the production possibilities curve of a trading nation outward, increasing the purchasing power of industries

What is the impact of government subsidies on the supply curve of a product?

• It shifts the supply curve to the left, decreasing the quantity supplied at each price. (supply shift to the left)

• It does not affect the supply curve. (no shift or movement)

• It shifts the supply curve to the right, increasing the quantity supplied at each price. (supply shift to the right)

How does inflation affect the purchasing power of money?

• Inflation increases the purchasing power of money.

• Inflation does not affect the purchasing power of money.

• Inflation decreases the purchasing power of money.

What is the effect of a decrease in income tax on the demand for luxury goods?

• It decreases the demand for luxury goods.

• It increases the demand for luxury goods.

• It does not affect the demand for luxury goods.

How does a decrease in interest rates impact the demand for housing?

• It decreases the demand for housing.

• It increases the demand for housing.

• It does not affect the demand for housing.

What is the effect of government tariffs on the supply curve of an imported product?

• It shifts the supply curve to the left, decreasing the quantity supplied at each price. (supply shift to the left)

• It does not affect the supply curve. (no shift or movement)

• It shifts the supply curve to the right, increasing the quantity supplied at each price. (supply shift to the right)