EPF Unit 1 Practice

How do the intersection of the supply and demand curves affect the market?

• It determines wages.

• It sets price controls.

• It ensures economic stability.

• It establishes price equilibrium.

What is a difference between the use of human capital in a centrally planned economy and a market economy?

• Centrally planned economies view their workers as machine parts, while market economies seek to increase the individual contributions of their workers.

• Centrally planned economies use workers to produce goods for the government, while market economies use workers to produce goods for consumers.

• Centrally planned economies use workers to produce goods by hand, while market economies use workers to facilitate mechanized production.

• Centrally planned economies value the contribution of their workers, while market economies consider their workers easily replaceable.

What would cause an increase in the price of gasoline?

• increased supply

• increased quality

• increased demand

• increased production

If the price of beef increased over the last decade how did the price impact the demand for beef over the past decade?

• Prices decreased, causing the demand to decrease.

• Prices decreased, causing the demand to increase.

• Prices increased, causing the demand to decrease.

• Prices increased, causing the demand to increase.

What distinguishes a monopoly from an oligopoly?

• Consumer decisions are more limited in a monopoly than in an oligopoly.

• Producers are more sensitive to market share in a monopoly than in an oligopoly.

• Consumer decisions have more influence on production in a monopoly than in an oligopoly.

• Producers provide a broader range of goods and services in a monopoly than in an oligopoly.

What would be the most likely impact of a price floor being imposed on the supply of a product?

• The price floor would result in a surplus of Product X.

• The price floor would result in a shortage of Product X.

• The price floor would result in increased demand for Product X.

• The price floor would result in fluctuating supply demanded for Product X.

In the past 15 years, the U.S. sweet potato industry has experienced a period of significant expansion. . . . All producers have benefited from the price-bolstering effects of rising export volumes and domestic demand for sweet potatoes. Indeed, sweet potato prices have increased more than 50 percent between 2000 and 2014, and attained a new record high for the 2013/14 marketing year. Per capita consumption and trade trends indicate that demand for sweet potatoes will be sustained into the near future. Based on the text, how did the forces of supply and demand affect the sweet potato market?

• They caused prices to increase.

• They caused prices to stagnate.

• They caused prices to fluctuate.

• They caused prices to decrease.

How does a change in demand affect price?

• Reduced demand leads to a shift in equilibrium pricing which raises the price of the product.

• Reduced demand leads to a shift in equilibrium pricing which lowers the price of the product.

• Increased demand leads to a shift in equilibrium pricing which lowers the price of the product.

• Increased demand leads to a shift in equilibrium pricing which causes the price of the product to fluctuate.

Which statement accurately compares the use of scarce resources in command and market economies?

• The government allocates scarce resources in both command and market economies.

• Individual property owners determine the use of resources in both command and market economies.

• Producers determine resource use in a command economy, while consumers determine resource use in a market economy.

• Market forces determine resource use in a market economy, while the government allocates resources in a command economy.

How are command and market economies different?

• Competition in command economies is illegal or discouraged, whereas competition drives market economies.

• Command economies are determined by market forces, whereas central planning is necessary for the success of market economies.

• A desire to meet the needs of consumers drives command economies, whereas market economies are based on the resources available.

• Command economies are most often seen in democratic countries, whereas market economies are most often seen in socialist countries.