Economics Quiz

What does the price system communicate to buyers and sellers?

• The quality of goods only

• The relative worth of goods

• The number of goods available

• The production methods used

What are low prices an incentive for?

• For consumers to sell goods

• For sellers to produce less

• For consumers to buy goods

• For workers to earn less money

What is a market failure according to the text?

• When the price system works perfectly

• When goods are sold above their legal market price

• When externalities or economic side effects are not reflected in prices

• When the government fixes prices for goods

What occurs when a government supplies a fixed amount of certain goods during a crisis?

• A surplus

• A black market

• A price ceiling

• Rationing

What is a price floor?

• The maximum price for a good

• The minimum price for a good

• The actual cost of production

• The equilibrium point in the market

Prices rise when there is a ____.

• deflation
• price ceiling

• recession
• shortage

When the price higher than the equilibrium point, there is a ______.

• deficit
• shortage
• surplus
• excess demand

During World War II, rations coupons were issued for good such a meat and ____.

• jewelry
• furniture
• butter

• electronics

In a(n) _______, people's well-being is threatened.

• paradise
• celebration
• crisis

• vacation

During World War II, people brought ____ on the black market.

• medicines
• weapons
• gasoline

• food