McLean Demand & Supply Unit Test

What is the economic principle that reflects the amount of a product offered for sale at all possible prices?

• Demand

• Inelastic Supply

• Supply

• Diminishing utility

Why would a government create price controls of goods?

• They want to control shortages

• They want to control surpluses

• They have goals for society to promote or discourage

• They are trying to create a communist country

Friends who choose to pay a $10 for a movie after learning that baseball tickets cost $20 are illustrating the ____________________

• sailing ship effect

• bandwagon effect

• substitution effect

• diminishing marginal utility

Prices are not just the cost of a product, they are also signals to answer big economic questions.  Without prices, what questions could not be answered?

• The government makes sure to answer those questions

• The market place will determine the needed items

• How things will be produced and why we are making them

• How things are produced, what to produce, and whom to produce it for

Which of these best describes the influence of high prices on the behavior of producers? 

• High prices would be a reason for producers to produce less

• High prices would be a reason for producers to produce more

• High prices have no significant influence on the behavior of producers

• High prices influence producers to use fewer raw materials and less labor

Which of these do producers of an item hope to achieve when adopting new technologies?

• inelastic supply of that item

• a repeal of subsidies for a production of that item

• a shift of the supply curve to the left

• a shift of the supply curve to the right

You budgeted $6 dollars for avocados but then buy four after you see that the cost of one has dropped from $3 to $1, What effect would see happen?

• A shift to the left in the Demand curve

• A shift to the right in the Demand curve

• A downward slope of the supply curve

• A shift to the left in the supply curve

What factor best explains an increase in demand for video games when the cost of video game consoles goes down?

• expectations

• complements

• consumer tastes

What are the characteristics of demand?

• the desire and the ability to buy a product

• the willingness, the desire, and the availability of a product

• The desire, ability and the willingness to buy a product

• The ability and the willingness to buy a product

What is the opposite of surplus?

• Equilibrium

• Shortage

• a price floor

• in elasticity of supply