Unit 2 Test

The law of demand states

• The amount of gifts a person is willing and able to give at different times.

• The amount of goods or services consumers are willing and able to buy at different prices

• Consumers will buy less of a good or service as the price goes down

• Consumers will buy more of a good or service as the price increases.

In California during Black Friday there was a shoot out in a Toys R Us over the brand new Tickle Me Elmo doll. What factor of demand caused this riot?

• Incomes

• Consumer Tastes

• Price of Complementary Goods

• Price of Substitute Goods

Which graph accurately shows an increase in the demand curve?

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When there is a decrease in demand, which way will the demand curve shift

• Left

• Right

• Up

• Down

What is the law of supply?

• The economic law states that producers are willing to supply more of a good or service as the price becomes higher.

• The economic law states that producers are willing to supply less of a good or service as the price becomes higher.

• The economic law states that consumers are willing to supply less of a good or service as the price becomes higher.

• The economic law states that consumers are willing to supply more of a good or service as the price becomes lower.

Matthew is the owner of an ice cream shop that makes a world famous butter pecan ice cream. There has been a frost that's damaged the supply of pecans. Due to the frost there has been a rise in the cost of pecans. What factor of supply has affected his business?

• Opportunity Costs

• Technology

• Cost of Production

• Income

Equilibrium Price is

• The point where two people agree on where to eat.

• The price at which the consumer and seller agree on a price.

• The place where stocks and bonds are sold.

• The price which the consumer and seller begin to bargain for.

Emily decides that in her embroidery business she wants to begin to sell custom made jewelry. This is an example of which factor that affects supply?

• Income

• Technology

• Substitute Goods

• Opportunity Costs

Listed below are goods that are considered to be complementary goods. Which is not a complementary good?

• Splenda and sugar

• Peanut Butter and Jelly

• Lasagna and Garlic Bread

• Oreos and Milk

What would occur to the demand for a substitute good if the price of the original decreases?

• The demand for the original would increase.

• There would be no change in demand.

• The demand for the original would decrease.

• The demand for both products would increase.