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WorksheetsUnit 2 EPF Assessment
Total questions: 30
Worksheet time: 7hrs 16mins
Why does an economist create a market demand schedule?
to learn what demands the market will make under unusual conditions
to have an idea of how a market would change if conditions in an area changed
to show how various conditions can change the demand for a good
to predict how people will change their buying habits when prices change
Which is an example of the law of demand at work?
The price of pizza falls when demand for pizza falls.
Demand for pizza goes down when tacos become more popular.
The price of pizza goes up when the price of cheese goes up.
Demand for pizza rises when the price of pizza falls.
If prices rise and income stays the same, what is the effect on demand?
More goods are bought.
Fewer goods are bought.
Demand stays the same.
More is bought of some goods and less of others.
How can the demand for one good be affected by increased demand for another one?
When goods are bought together, increased demand for one will increase demand for the other.
A drop in the price for a good will increase demand for it and its substitute.
If goods are substitutes, increased demand for one will increase demand for the other.
If goods are used together, increased demand for one will increase demand for the other.
How does a person’s perception of a good as a necessity or a luxury affect his or her purchase of it?
If a good is perceived as a luxury, demand becomes elastic.
A good that is perceived as a necessity will be purchased even if the price rises.
People who have a lot of money will buy goods even if they think they are a luxury.
A good that is perceived as expensive will no longer be considered a necessity.
Why is the demand for milk inelastic?
It is considered a necessity, not a luxury.
It is considered a luxury, not a necessity.
There are many substitutes for milk.
Buying milk takes a large portion of income.
John gets a raise and decides to start buying enriched pasta instead of cheaper instant noodles. For John, instant noodles are examples of _____________
inferior goods.
in-elasticity.
market demand.
complements.
According to the graph above, how many fewer shirts are sold at the new demand level for any given price?
200
500
400
300
What does the demand curve in the graph above tell you about how consumer behavior changes if Beth’s Bagels raises the price from $.25 to $1.50?
Quantity demanded decreases.
Quantity demanded increases.
Demand shifts to the left.
Demand shifts to the right.
When the price of a product goes down, what happens?
Existing firms continue their usual output but earn less.
Existing producers expand, and new producers enter the market.
Some producers produce less, and others drop out of the market.
New firms enter the market as older ones drop out.
A supply schedule is characterized by which of the following?
It shows the factors that could influence supply.
It lists supply for a specific good at various prices.
It is sensitive to changes in the costs of labor and parts.
It shows the quantity supplied at only one price.
Which of these best describes a supply curve?
It always falls from left to right.
It rises if supply is elastic.
It falls if supply decreases.
It always rises from left to right.
Ultimately, the main factor that drives decisions about the production of goods and services is the _________.
desire to maximize profits
public need for better goods
availability of natural resources
government regulations and rules
What happens when a market is in disequilibrium and prices are flexible?
excess demand is created
market forces push toward equilibrium
sellers waste their resources
unsold perishable goods are thrown out
Why does a government place price ceilings, such as rent control, on some “essential” goods?
to prevent inflation during boom times
to keep goods from becoming too expensive
to reduce demand for these goods
to keep business people from making large profits
In general, what happens to the price of a good or service when a shortage of that good or service occurs?
It remains unchanged while quantity demanded drops.
It decreases until quantity demanded equals quantity supplied.
It increases until quantity demanded equals quantity supplied.
A price ceiling is imposed, lowering the price to meet the demaind.
When is a market at equilibrium?
when unsold goods begin to pile up
when quantity demanded equals quantity supplied
when prices equal the cost of production
when suppliers begin to reduce prices
On which kinds of goods do governments generally place price ceilings?
those that are essential but too expensive for some consumers
those that are not necessary but have become customary
those that are essential and cheap
those that are cheap but could become more expensive without the ceiling
Suppose the market for the magazine in the graph above is in equilibrium. Some students insist on raising the cover price by $1 and printing the same quantity. What is likely to happen?
The demand for the magazine will go up.
There will be a surplus of magazines.
There will be a shortage of magazines.
There will be a shortage of 150 magazines.
Which of the following could cause the supply curve of a good to shift to the right?
new technology to produce the good
a minimum wage increase
raw materials shortage
higher taxes on the good
What does a low price tell suppliers?
Not enough of a product is being produced.
Demand for a product will go up.
Too much of a product is being produced.
Demand for a product will go down.
How did an improvement in the technology for producing cell phones affect supply?
The supply curve moved to the right.
The demand curve moved to the right.
The supply curve moved to the left.
The demand curve moved to the left.
Which of the following are ways the government controls markets?
equilibrium price and equilibrium point
shortages and surpluses
subsidies and disequilibrium
price ceilings and price floors
What happens when the government imposes more taxes on a company?
It will cost them more to produce goods so the supply will go down.
It will cost them less to produce goods so the supply will go up.
It will cost them more to produce goods so the supply will go up.
It will cost them less to produce goods so the supply will go down.
Peanut butter is on sale. What happens to the demand for peanut butter and for jelly?
The demand goes down for peanut butter and up for jelly.
The demand goes up for peanut butter and down for jelly.
The demand goes up for both peanut butter and jelly.
The demand goes down for both peanut butter and jelly.
Law of Diminishing Returns means _____________
each new worker increases output more than previous workers.
companies can hire as many workers as they want.
the more workers the company hires, the more output the company can make.
each new worker hired does not necessarily increase output as much as previously hired workers.
Which of the following does NOT cause a shift of the entire demand curve?
A change in consumer expectations
A change in the size of the population
A change in price
A change in income
What is a substitute good?
A good that is bought when you have more money.
A good that is generally sold with another good.
A good that has an equivalent value.
A good that can be replaced by at least one other good.
In the Law of Supply, ____________________
producers will increase supply no matter what the price
producers will increase supply as price goes up
all the choices listed
producers will increase supply as the price goes down
What are complementary goods?
They are goods that are substitutes for each other.
They are free goods often given for an incentive.
They are goods whose demand goes in opposite directions.
They are goods that are usually purchased together.
