Unit 3 Test Econ

What is the law of demand?

• As price increases, demand increases

• As price increases, demand decreases

• As price decreases, demand decreases

• Demand is not affected by price

Which of the following best defines price equilibrium?

• The price at which supply exceeds demand

• The price at which demand exceeds supply

• The price at which quantity supplied equals quantity demanded

• The highest possible price for a product

Which of the following is NOT a factor of production?

• Land

• Labor

• Money

• Capital

Which type of market is characterized by a single seller?

• Perfect competition

• Monopolistic competition

• Monopoly

• Oligopoly

What is the main purpose of government economic regulations?

• To increase profits for businesses

• To control inflation only

• To influence or control economic activity for the public good

• To eliminate all competition

If the supply of a product increases while demand remains the same, what is likely to happen to the equilibrium price?

• It will increase

• It will decrease

• It will stay the same

• It will become unpredictable

Which of the following is an example of a government regulation in the economy?

• Setting minimum wage laws

• Allowing free trade without restrictions

• Encouraging monopolies

• Ignoring environmental concerns

A bakery increases its production costs due to higher flour prices. What is the most likely effect on the supply curve for bread?

• The supply curve shifts to the right

• The supply curve shifts to the left

• The supply curve does not change

• The demand curve shifts to the right

Which market structure is characterized by many sellers offering similar but not identical products?

• Monopoly

• Oligopoly

• Monopolistic competition

• Perfect competition

If a government sets a price ceiling below the equilibrium price, what is the most likely result?

• Surplus

• Shortage

• No effect

• Increase in supply