WorksheetsUnit 2 Review Microeconomics
Total questions: 89
Worksheet time: 1hrs 4mins
The relationship between quantity supplied and price is __________ and the relationship between quantity demanded and price is ________________.
direct, inverse
inverse, direct
inverse, inverse
direct, direct
According to the graph, at a price of $7:
there would be a shortage of 40 units.
there would be a surplus of 40 units.
there would be a surplus of 20 units.
the market would be in equilibrium.
In order for a price floor to be effective, it must be set __________ the equilibrium price, while a price ceiling must be set ___________ the equilibrium price in order to be effective.
above; below
above; above
below; above
below; below
There will be a surplus of wheat when:
price is below the equilibrium level.
the supply curve is downward sloping and the demand curve is upward sloping.
the demand and supply curves fail to intersect.
consumers want to buy less than producers offer for sale.
Which of the following will NOT result in a change in the supply of digital camcorders?
New firms enter the industry.
Consumers increasingly prefer digital camcorders over cameras.
Prices of photographic equipment increase dramatically.
Production technology advances rapidly.
A decrease in quantity demanded is depicted by a:
move from point x to point y
a shift from D1 to D2
shift from D2 to D1
move from point y to point x
Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, we would expect:
the supply of flour to be unaffected.
the supply of flour to decrease.
the supply of flour to increase.
the demand for flour to decrease.
Good X and good Y are complements. If the price of good Y increases, then the:
demand for good X will decrease.
market price of good X will decrease.
demand for good X will increase.
quantity demanded of good X will increase.
Refer to the graph above. On the graph, the movement from S to S1 could be caused by:
a decrease in the price of the good.
an increase in income.
an improvement in technology.
an increase in input prices.
When price is lower than the equilibrium price,
sellers desire to produce and sell less than buyers wish to purchase.
buyers desire to purchase more than is produced.
sellers desire to produce and sell more than buyers wish to purchase.
quantity demanded equals quantity supplied.
If the price of a substitute to good X decreases, then:
the demand for good X will increase.
the market price of good X will decrease.
the demand for good X will decrease.
the demand for good X will not change.
The increase in the demand for widgets, shown in the figure above, is caused by a decrease in the price of McBoover devices. Therefore:
widgets and McBoover devices are substitutes.
widgets and McBoover devices are complements.
McBoover devices are a normal good.
widgets are a normal good.
According to the law of supply, what happens as price increases?
The quantity supplied increases.
The supply curve shifts to the right.
The quantity supplied decreases.
The supply curve shifts to the left.
The Law of Demand states that as price decreases…
quantity demanded increases
quantity demanded decreases
quantity supplied increases
quantity supplied decreases
On a demand curve, movement along the curve, as opposed to a shift in the entire curve, illustrates:
A change in quantity demanded
An increase in demand
A decrease in demand
A change in quantity supplied
What causes an upward sloping supply curve?
A direct relationship between price and quantity supplied.
An inverse relationship between price and quantity supplied.
A direct relationship between price and quantity demanded
An inverse relationship between price and quantity demanded.
What causes a downward sloping demand curve?
A direct relationship between price and quantity demanded
An inverse relationship between price and quantity supplied.
A direct relationship between quantity and price demanded.
An inverse relationship between price and quantity demanded
What is the only factor that does NOT create a new curve (a shift)?
Change in Technology
Change in tasts/preferences
Change in Price of a product
Change in Income
Which of the following illustrate a price floor? Select ALL that apply
Minimum Wage
Rent control
Which of the following illustrates a price ceiling? Select ALL that apply.
Minimum wage
Rent contorl
Which of the following are complementary goods? Select ALL that apply.
Two goods that are used in place of one another
Hot Dogs and Hamburgers
Two goods that are bought and used together
movie tickets and popcorn
Resource cost, other goods that could be produced, taxes/gov't regulations, technology, expectations of producers, and number of sellers:
Supply determinants/ shifters
Supply movers
Demand determinants/ shifters
Demand movers
Tastes/Preferences, related goods, income, number of buyers, expectations:
Supply determinants/ shifters
Demand determinants/ shifters
Supply movers
Demand movers
Which of the following scenarios accurately describes a decrease in quantity supplied?
movement from point a to point b
movement from point b to point a
shift from S to S2 (left)
shift from S to S1 (right)
Which of the following accurately describes an increase in demand?
movement from point a to point b
movement from point b to point a
shift from D to D1
shift from D to D2
True or false: a change in price causes a change in quantity supplied or quantity demanded, not a shift
True
False
Which of the following accurately describes the impact on supply if the income of consumers increases?
supply would not change
movement from point a to point b
movement from S to S1
movement from S to S2
The cost of oil used to make petroleum products increases. What impact will this have on supply and demand?
Supply: increase Demand: increase
Supply: decrease Demand: increase
Supply: no change
Demand: decrease
Supply: decrease Demand: no change
Which of the following exists if the price of a good is higher than the equilibrium price? Select ALL that apply.
A price ceiling
A price floor
A shortage
A surplus
Which of the following scenarios would result in the shifting demand curve shown here?
Increase in consumers' incomes
A good or service becomes out of style
Suppliers find new resources
Government decides to tax the good/service more
Which of the following would cause a this shift in the supply curve?
A decrease in the cost of raw materials
An increase in government subsidies
An increase in production costs
A technological advancement
This graph demonstrates...
Decrease in demand
Increase in demand
Increase in supply
Decrease in supply
Which of the following would most likely cause an increase in the demand for electric cars?
An increase in consumer income
A decrease in the number of buyers
A decrease in the price of gasoline
An increase in the price of electric car batteries
If the government imposes a tax on the production of a good, what is the expected effect on the supply curve?
The supply curve shifts to the left
The supply curve shifts to the right
The demand curve shifts to the left
The demand curve shifts to the right
Goods that can be used in place of one another
Substitute goods
Complementary goods
Veblen goods
Common access resources
A government payment to encourage or protect certain activities
Subsidy
Excise tax
Sin tax
Supply chain
Explain the effects on price and quantity
Price increases (P2>P1) and quantity increases (Q2>Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
Price decreases (P2<P1) and quantity increases (Q2>Q1)
Price decreases (P2<P1) and quantity decreases (Q2<Q1)
Explain the effects on price and quantity
Price increases (P2>P1) and quantity increases (Q2>Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
Price decreases (P2<P1) and quantity decreases (Q2<Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
Explain the effects on price and quantity
Price increases (P2>P1) and quantity increases (Q2>Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
Price decreases (P2<P1) and quantity increases (Q2>Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
Explain the effects on price and quantity
Price increases (P2>P1) and quantity increases (Q2>Q1)
Price decreases (P1<P2) and quantity increases (Q1<Q2)
Price decreases (P2<P1) and quantity decreases (Q2<Q1)
Price increases (P2>P1) and quantity decreases (Q2<Q1)
According to the graph, at a price of $7:
there would be a shortage of 40 units.
there would be a surplus of 40 units.
there would be a surplus of 20 units.
the market would be in equilibrium.
A decrease in quantity demanded is depicted by a:
move from point x to point y
a shift from D1 to D2
shift from D2 to D1
move from point y to point x
Good X and good Y are complements. If the price of good Y increases, then the:
demand for good X will decrease.
market price of good X will decrease.
demand for good X will increase.
quantity demanded of good X will increase.
If the price of a substitute to good X decreases, then:
the demand for good X will increase.
the market price of good X will decrease.
the demand for good X will decrease.
the demand for good X will not change.
In the graph, the equilibrium price is approximately
$3.00
$1.00
$5.00
$6.00
A volcano erupts in Hawaii that destroys or severely damages many of the pineapple orchards located there. What will be the effect on price and quantity of pineapples sold?
price will rise and quantity will fall
price will fall and quantity will fall
price will fall and quantity will rise
price will rise and quantity will also rise
The change seen in the graph would have been caused by
a decrease in the price of resources
a decrease in technology
an increase in business taxes and regualtion
an increase in the number of consumers
fewer sellers in the marketplace
an increase in the cost of raw materials
the introduction of new technology
a decrease in productivity
Which of the following are the shifters of Demand?
Taste and Preference
Number of Consumers
Income
Price of Related Goods
Future Expectations
Which of the following will NOT shift the Demand curve?
Taste and Preferences
Number of Consumers
Price
Price of Related Goods
What would have caused the increase in supply?
Decrease in sellers
Increase in resource costs
Decrease in resource costs
A hurricane
Price floors are set (a) the equilibrium point in order to protect producers.
Government imposed tax will...
increase supply
decrease supply
Which illustrates a price floor?
A
B
C
P*
When is a market in equilibrium?
When suppliers have extra surpluses that will carry over to the next month
When consumers pay a price that exceeds the intersection of supply and demand curves
When the amount producers want to sell is equal to the amount consumers want to buy
Whenever the demand curve is downsloping and the supply curve is upsloping
Which diagram illustrates the effect of a decrease in personal income?
A
B
C
D
Which diagram illustrates an increase in the number of firms in the market?
A
B
C
D
When you buy a game system and games together, this is an example of which economic concept?
Complements
Substitutions
Elasticity
Economics
When you buy a PlayStation instead of an X-Box because the price of the PlayStation went up, this is an example of what?
Complements
Substitutions
Elasticity
Economics
A ____ is a chart or table showing quantities supplied at different possible prices.
supply schedule
supply curve
market table
profit graph
When a new producer of soap enters the market, and the supply curve shifts to the right, which determinant of supply shift is this an example of?
Number of Sellers
Subsidies
Producer Expectations
Input Costs
How are milk and cereal complements?
You usually buy milk and cereal together
They are eaten together
You get complements based on your choices of each
Cereal is expensive but Milk is not
The table below is an example of a
Supply Schedule
Supply Curve
Demand Curve
Demand Schedule
In this supply & demand schedule, what would happen if the price of the socks was set at $2.50 a pair?
All socks would sell because it would be the equilibrium price.
a shortage.
a surplus.
No socks would be produced because it would be the equilibrium price.
Which of the following is NOT a determinant of demand?
Consumer income
Price of related goods
Technology
Tastes and preferences
What is the term for the maximum legal price that can be charged for a good or service?
Price floor
Price ceiling
Equilibrium price
Market price
Which of the following is a determinant of supply?
Consumer tastes
Number of buyers
Input prices
Income
What is the point called where quantity demanded equals quantity supplied?
Surplus
Shortage
Equilibrium
Ceiling
A price floor set above the equilibrium price will result in:
Shortage
Surplus
Equilibrium
No effect
Which of the following would cause a movement along the demand curve, rather than a shift?
Change in consumer income
Change in the price of the good itself
Change in tastes and preferences
Change in the price of a substitute
If the price of a substitute good increases, what is likely to happen to the demand for the original good?
Demand decreases
Demand increases
Demand remains unchanged
Supply increases
Suppose a new technology reduces production costs for smartphones. What will likely happen to the supply curve for smartphones?
It will shift to the left
It will shift to the right
It will not change
It will become vertical
If a government sets a price ceiling below the equilibrium price, what is the most likely result?
Surplus
Shortage
No effect
Decrease in demand
If the government imposes a price floor on wheat that is above the equilibrium price, what will likely happen to the quantity supplied and quantity demanded?
Both will increase
Both will decrease
Quantity supplied will exceed quantity demanded
Quantity demanded will exceed quantity supplied
A decrease in the price of inputs used in production will most likely cause:
A decrease in supply
An increase in supply
A decrease in demand
An increase in demand
Which of the following would NOT shift the supply curve for cars?
A change in the price of steel
A new car manufacturing technology
A change in consumer preferences for cars
A change in the number of car producers
A government sets a price ceiling on gasoline below the equilibrium price. Explain the likely impact on the market for gasoline.
There will be a surplus of gasoline
There will be a shortage of gasoline
The market will remain in equilibrium
The price will rise above the ceiling
A bakery faces higher costs for flour, a key input. Predict and explain the effect on the bakery’s supply curve and the market equilibrium.
Supply curve shifts right, equilibrium price falls
Supply curve shifts left, equilibrium price rises
Supply curve shifts right, equilibrium price rises
Supply curve does not change, equilibrium price falls
If the supply curve on this graph represents iPhones, what would cause the change from S to S1 (red to purple line)?
An increase in computer chips
An increase in the cost of producing an iPhone
Employees figure out a way to work more efficiently
The price of iPhones increases
Graph shows which of the following?
a decrease equilibrium price and quantity
an increase equilibrium price and quantity
a decrease in equilibrium price and an increase in equilibrium quantity
an increase in equilibrium price and a decrease in equilibrium quantity
