Economics Unit 2 Review

What is the law of demand?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded increases.

• As the price of a good increases, the quantity demanded remains constant.

• As the price of a good decreases, the quantity demanded decreases.

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DOK Level 1: Recall

Which of the following best describes market equilibrium?

• The point where supply exceeds demand.

• The point where demand exceeds supply.

• The point where supply equals demand.

• The point where prices are highest.

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DOK Level 1: Recall

Identify the type of market structure characterized by a single seller.

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

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DOK Level 1: Recall

What is a tariff?

• A tax on exports

• A subsidy for domestic producers

• A tax on imports

• A quota on foreign goods

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DOK Level 1: Recall

Which of the following is an example of comparative advantage?

• A country producing all goods more efficiently than another country.

• A country specializing in the production of goods it can produce at a lower opportunity cost.

• A country imposing tariffs to protect its industries.

• A country producing goods at the same cost as another country.

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DOK Level 1: Recall

How does the government typically intervene in trade?

• By setting prices for all goods

• By imposing tariffs and quotas

• By producing goods directly

• By eliminating all trade barriers

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DOK Level 1: Recall

If the demand for a product increases, what is likely to happen to the equilibrium price and quantity?

• Both price and quantity will decrease.

• Price will increase, and quantity will decrease.

• Both price and quantity will increase.

• Price will decrease, and quantity will increase.

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DOK Level 2: Skill/Concept

Which market structure is characterized by many firms selling similar but not identical products?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

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DOK Level 1: Recall

What is the effect of a quota on the supply of a good?

• It increases the supply.

• It decreases the supply.

• It has no effect on the supply.

• It makes the supply infinite.

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DOK Level 1: Recall

Calculate the opportunity cost if a country can produce either 10 units of good A or 5 units of good B.

• 2 units of good A per unit of good B

• 0.5 units of good A per unit of good B

• 5 units of good A per unit of good B

• 10 units of good A per unit of good B

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DOK Level 2: Skill/Concept