Unit 3 Test Econ Quizs

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 would be a natural resource?

• TV announcers
• bankers
• fish
• farmers

What are costs that have already been incurred, that can never be recovered, called?

• lost costs

• sunk costs

• dead costs

• wasted costs

Revenue - Production Cost =

A company is deciding whether to produce more units of a product. Which cost should it consider to make this decision?

• Sunk cost

• Marginal cost

• Fixed cost

• Opportunity cost

A company is considering whether to enter a perfectly competitive market. What strategic factor should it consider before entering?

• Ability to set prices above market rate

• Barriers to entry are high

• Products are highly differentiated

• The ease of entry and the inability to control prices

Which of the following best describes the relationship between supply and price?

• As price increases, supply decreases

• As price increases, supply increases

• Supply is not affected by price

• As price decreases, supply increases

If the government imposes a tax on a good, what is the likely effect on the supply curve?

• It shifts to the right

• It shifts to the left

• It does not change

• It becomes vertical

Which of the following is an example of a fixed cost for a factory?

• Wages for hourly workers

• Cost of raw materials

• Rent for the building

• Utility bills that vary with production

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