Econ Unit 2 Test: Microeconomics

Which of the following is an example of a service market?

• A grocery store

• A personal tutor

• An electronics store

• A farmer's market

Why do prices rise when demand is high but supply is low?

• To encourage more people to buy

• To make sure there’s enough for everyone

• To reflect the scarcity of the good or service

• To increase profits for producers

What would happen if a product has high demand but low supply?

• Prices would decrease

• Prices would increase

• Prices would remain constant

• There would be a surplus

Which is an example of an elastic good?

• Gasoline

• Salt

• Luxury cars

• Medicine

What is the role of an entrepreneur in the factors of production?

• To provide natural resources

• To combine resources and take risks to create new products

• To manufacture products

• To manage the labor force

If a company decides to produce more burgers instead of pizzas, the cost of not making pizzas is called:

• Production cost

• Opportunity cost

• Capital cost

• Supply cost

Which of these is a factor of production?

• Technology

• Consumer choice

• Labor

• Prices

Why is market equilibrium important in an economy?

• It prevents surpluses and shortages

• It increases the total number of buyers

• It ensures that prices are always high

• It stops all changes in the market

What does inelastic mean in terms of consumer demand?

• People buy more when prices go down

• People buy less when prices go up

• People buy the same amount, no matter the price

• People refuse to buy the product

Which is an example of a production cost?

• The total amount of money spent on advertising

• The money spent on raw materials and workers

• The price consumers pay for a finished product

• The money saved by using new technology