Unit 1 - Test Review

Which of the following best describes the law of demand?

• As the price of a good increases, the quantity demanded increases.
• As the price of a good increases, the quantity demanded decreases.
• As the price of a good decreases, the quantity demanded decreases.
• The quantity demanded is unaffected by price changes.

How is the demand curve typically represented on a graph?

• It slopes upward from left to right.
• It slopes downward from left to right.
• It is a vertical line.
• It is a straight horizontal line.

According to the law of supply, what happens as the price of a good increases?

• The quantity supplied increases.
• The quantity demanded increases.
• The quantity supplied remains constant.
• The quantity supplied decreases.

Which of the following statements about the supply curve is accurate?

• It is a horizontal line.
• It is a vertical line.
• It typically slopes upward from left to right.
• It typically slopes downward from left to right.

What is the relationship between supply and demand in establishing market equilibrium?

• Market equilibrium occurs when supply exceeds demand.
• Supply and demand are unrelated to market equilibrium.
• Market equilibrium occurs when quantity demanded equals quantity supplied.
• Market equilibrium is determined solely by supply.

What occurs when there is a shortage in a market?

• The quantity demanded exceeds the quantity supplied.
• Prices remain constant.
• The quantity supplied exceeds the quantity demanded.
• The market reaches equilibrium.

What does a surplus indicate in a market?

• The quantity demanded exceeds the quantity supplied.
• There is a shortage of goods available.
• The quantity supplied exceeds the quantity demanded.
• The market is in equilibrium.

Which economic system is primarily influenced by historical practices and customs?

• Mixed economy
• Traditional economy
• Command economy
• Market economy

Which of the following statements about traditional economies is accurate?

• They rely heavily on modern technology.
• They often utilize a barter system.
• They are controlled by a central authority.
• They have no influence from cultural practices.

In which type of economy does the government exert total control over production and pricing?

• Command economy
• Traditional economy
• Mixed economy
• Market economy