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Unit 2 Microeconomics EOC Review

Total questions: 60

Worksheet time: 1hrs 5mins

Name
Class
Date
1.

The primary function of money in all economic systems is to serve as

a)

a capital good

b)

a substitution good

c)

a medium of exchange

d)

a comparative advantage

2.

A price ceiling results in

a)

a shortage of that good

b)

a new equilibrium price

c)

surplus production of that good

d)

a decrease in consumer demand

3.
Which of the following is a disadvantage of both sole proprietorship and partnership?
a)
unlimited life
b)
unlimited liabilty
c)
double taxation
d)
resource management
4.
Which form of business organization has the advantage of limited liability?
a)
sole proprietorship
b)
partnership
c)
corporation
d)
franchise
5.
The graph shows a(n) _________ in demand where the price and quantity both __________
a)
increase, decrease
b)
decrease. increase
c)
decrease decrease
d)
increase  increase
6.
The following graph illustrates a movement along the _______ or the law of _________
a)
supply curve, law of marginals
b)
demand curve, law of marginals
c)
supply curve, law of supply
d)
demand curve, law of demand
7.
According to the graph, what was the original equilibrium price and quantity
a)
$3, 30
b)
$4, 100
c)
$5, 85
d)
$7,150
8.

What kind of market runs most efficienctly when one large firm supplies all of the output?

a)

natural monopoly

b)

network

c)

perfect competition

d)

imperfect competition

9.

What is monopolistic competition?

a)

one company selling the identical product under different names

b)

one company selling several different products under different names

c)

a very few companies selling identical products

d)

many companies selling similiar but not identical products

10.

WHich of the following is not an example of barriers to entry?

a)

cable companies must lay miles of underground cable before they can serve a single customer in a new market

b)

in some countries, laws require retail stores to be closed on Sundays

c)

An entrepreneur wishing to own a clothing store must rent a building, hire workers and buy clothing for sale

d)

A person who wishes to practice medicine is required to attend medical school, complete and internship and pass a state exam.

11.

Which statement describes market conditions at equilibrium?

a)

supply is greatern that demand

b)

demand is greater than supply

c)

Quantity supplied is equal to quantity demanded

d)

there is no supply or demand

12.

WHich of the following would cause an increase in demand?

a)

Yogurt prices rise due to a milk shortage

b)

Yogurt prices fall due to a milk surplus

c)

A new health report says that yogurt makes you sick

d)

a new health report that says that yogurt keeps you healthy

13.
Several Companies sell similar products is called what type of competition?
a)
Perfect Competition
b)
Monopolistic Competition
c)
Monopoly
d)
Oligopoly
14.
What is it when a large group of suppliers all produce the same goods?
a)
Perfect Competition
b)
Monopolistic COmpetition
c)
Monopoly
d)
Oligopoly
15.
An example of perfect competition would be what?
a)
Milk
b)
Cars
c)
Jeans
16.
What is it when a few businesses dominate the market?
a)
Monopolistic Competition
b)
Monopoly
c)
Perfect Competition
d)
Oligopoly
17.
An example of an oligopoly would be what?
a)
Auto industry
b)
Milk 
c)
Jeans
18.
What is it when a market is controlled by one major supplier?
a)
Monopolistic Competition
b)
Perfect Competition
c)
Oligopoly
d)
Monopoly
19.
This represents ownership rights to a certain portion of profits and assets of the company. 
a)
Stock 
b)
Bonds 
c)
Articles of incorporation
d)
corporate charter 
20.
The minimum wage is a type of ____________
a)
price floor
b)
price ceiling
c)
equilibrium price
d)
marginal price 
21.
When Austin pays rent for his business, he has made a transaction in the______________ market
a)
factor
b)
public
c)
product
d)
stock 
22.

Which would be a complementary good for Fruit Loops?

a)

milk

b)

frootie tooties

c)

Cheerios

d)

Bacon

23.
If a study came out proving that chocolate milk was a healthy post-workout beverage, what would likely happen?
a)
Demand increases for Choc. Milk
b)
Demand Decreases for Choc. Milk
c)
Supply Increases for Choc. Milk
d)
Supply Decreases for Choc. Milk
24.
True or false: Privately owned companies sell shares in the stock market.
a)
True
b)
False
25.
Based on the graph shown, what has happened?
a)
Supply Increase
b)
Supply Decrease
c)
Demand Increase
d)
Demand Decrease
26.
The point at which supply and demand intersect is called the:
a)
Criss-Cross
b)
Equilibrium
c)
Intersection
d)
Supply & Demand Schedule
27.
In the resource market, a)_________ are sellers and b)________ are buyers.
a)
a) Firms, b) Households
b)
a) Consumers, b) Owners
c)
a) Households, b) Firms
d)
a) Owners, b) Consumers
28.
Collusion is an illegal agreement between firms in which type of market structure?
a)
Perfect Competition
b)
Oligopoly
c)
Monopolistic Competition
d)
Monopoly
29.
The graph represents: Demand or Supply?
a)
Demand
b)
Supply
30.
Amount of a product consumers will buy at a given prices is called what?
a)
Substitute
b)
Demand
31.
Law of demand says if the price of pizza falls, the demand for pizza will what?
a)
Increase
b)
Decrease
32.
What kind of graph is this?
a)
Supply
b)
Demand
33.
The Law of Supply states:
a)
as price increases, supply increases
b)
as prices decrease, demand increases
34.
Which of the following shifts a PPC outward
a)
influx of immigrants
b)
increase in unemployment
c)
increase in resource costs
d)
increase in technology
35.
Where do individuals spend the money they earn?
a)
the factor market
b)
product market
c)
capital market
d)
in individual households
36.
In the market clearing price
a)
the demand by buyer is rapidly growing
b)
the supply by sellers meets the demand from buyers
c)
sellers have provided more goods than the demand from buyers
d)
sellers have provided enough goods for buyers'demand, but at prices that are too high
37.

What is being represented by the "red flow line"

a)

The flow of money

b)

The flow of goods and services

c)

The water cycle

d)

Supply and Demand

38.

What is being represented by the "green flow lines"

a)

Flow of Money

b)

Flow of Goods and Services

c)

Law

d)

Cardi B

39.
In the circular flow model, the product market describes _____.
a)
stores that sell goods and services to households
b)
the government paying for public goods
c)
households selling their labor to businesses
d)
households receive income from businesses
40.
Which arrows on this diagram would represent the transaction between Joe who rents his office to Homework Inc., a company that provides tutoring services?
a)
2,3
b)
4,7
c)
1,2
d)
5,6
41.
When the supply of a product or service goes up and the demand stays the same the Price will typically do what? 
a)
rise
b)
fall
c)
stay the same
d)
Consumer
42.
When the demand for a product or service is higher than the supply this causes what?
a)
shortage
b)
consumer
c)
surplus
d)
equilibrium
43.
The desire or willingness a consumer has to purchase a good or a service is called?
a)
shortage
b)
supply
c)
price
d)
demand
44.
a person or company that makes, grows, or supplies goods to sell is called the?
a)
damand
b)
price
c)
producer
d)
shortage
45.

What is an increase or decrease in Quantity Demanded or Supplied called?

a)

A shift

b)

An increase

c)

A decrease

46.

Which of the following defines "Complementary Goods?"

a)

Goods that can be used to replace the purchase of similar goods when prices rise

b)

Goods that are commonly used with other goods

c)

Goods that are independent of other markets

47.

Which of the following defines "Substitute Goods?"

a)

Goods that can be used to replace the purchase of similar goods when prices rise

b)

Goods that are commonly used with other goods

c)

Goods that are independent of the market

48.

Goods for which demand goes down as income goes up are better known as....

a)

Inferior Goods

b)

Normal Goods

c)

Public Goods

d)

Private Goods

49.

Determinants of demand include income, expectations, taste, and...

a)

Consumer Preference

b)

Taxes

c)

Marginal Equity

d)

Unit Elasticity

50.

All of the following are examples of complements EXCEPT

a)

butter and margarine

b)

cameras and film

c)

peanut butter and jelly

d)

flashlights and batteries

51.

Queen Bee (Beyonce) is seen wearing a new short and sleek dress. People now want this dress. Which demand determinant is this most likely to fall under?

a)

Change in Consumer Income

b)

Change in Consumer Tastes

c)

Change in Price of Substitute Good

d)

Change in Consumer Price Expectations

52.
Oreo cookies are now extremely expensive to purchase. Instead of buying Oreo cookies, I now want to buy Chips Ahoy. What determinant of demand does this likely fall under?
a)
Change in Price of Complementary Good
b)
Change in Price of Substitute Good
c)
Change in Consumer Price Expectations
d)
Change in Number of Consumers in the Market
53.
The government is giving every individual 18 and above an extra $1,000.00 this year. What determinant of demand does this likely fall under?
a)
Change in Consumer Tastes
b)
Change in Consumer Price Expectations
c)
Change in Number of Consumers in the Market
d)
Change in Consumer Income
54.

I know that the iPhone X Plus is coming out next year but really need a phone badly. I'm thinking about buying an iPhone 7 when the new iPhone comes to the market because it will be much cheaper than today's price. What determinant of demand does this suggest?

a)

Change in Price of Complementary Good

b)

Change in Consumer Price Expectations

c)

Change in Number of Consumers in the Market

d)

Change in Consumer Income

55.
McDonald's is having a special on their Big Mac purchases this week. Every Big Mac is $3 cheaper! When burger prices go down, this means you can buy more fries and a drink. What demand factor does this relate to?
a)
Change in Consumer Tastes
b)
Change in Price of Substitute Good
c)
Change in Price of Complementary Good
d)
Change in Number of Consumers in the Market
56.
Porterville, California is now a major immigration center for Russians. Over 10,000 Russians are living in Porterville now! What demand does this determine?
a)
Change in Consumer Income
b)
Change in Consumer Tastes
c)
Change in Consumer Price Expectations
d)
Change in Number of Consumers in the Market
57.
Labor costs are rising through the roof! Minimum wages are now at $25 an hour. This means even the basic item will need to cost more to keep up with rising costs. What determinant of supply does this most relate to?
a)
Change in Technology
b)
Change in Number of Sellers in the Market
c)
Change in Cost of Factors of Production
58.
A brand new machine cooks, cleans, and never messes up a fast food order. This means we can sell more fast food than ever before, leading to producers cutting cost of fast food. Which supply factor does this most likely relate to?
a)
Change in Technology
b)
Change in Profit Opportunities Producing other Products
c)
Change in Producers' Price Expectations
59.

If the price of an item increase, demand for its substitutes

a)

decreases

b)

increases

c)

there is no way to tell

d)

is unaffected

60.

When the income in households increase, what is the likely result

a)

The supply curve becomes vertical

b)

The demand curve shifts to the right

c)

The demand curve shifts to the left

d)

The supply curve will shift to the left

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