Economics Unit 2 Test

High prices cause producers to

• decrease supply

• decrease demand

• increase supply

• increase demand

In what business organization do two or more people enjoy equal decision making authority?

• corporation

• partnership

• limited proprietorship

• sole proprietorship

In the circular flow model, businesses purchase (a)   from households.

• products

• resources
• taxes

• final goods

A disadvantage of partnerships include

• difficult to start-up

• potential for conflict

• controlled by board of directors

• specialization

Since shareholders only risk what they buy in stocks, this business organization has low liability.

• franchise

• sole proprietorship

• partnership

• corporation

Which of the following markets is an example of an oligopoly?

• clothing

• soft drinks

• blueberries

• all of the above

One of the functions of money is

• consumable good

• medium of exchange

• productive resource

• store of exchange

This market structure is characterized by an identical product sold at the same price by various companies.

• monopoly

• pure/perfect competition

• oligopoly

• monopolistic competition

Which of the following prices would cause a shortage? The equilibrium price is at $110.

• $100

• $120

• $150

• All of the above

A price floor causes

• a surplus

• decreased prices

• shortage

• increased demand