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AP Econ Unit 2

Total questions: 21

Worksheet time: 11mins

Name
Class
Date
1.

How will an increase in demand and a simultaneous decrease in supply affect the

equilibrium price and quantity of a good in a market?

a)

Price increase and quantity increase

b)

Price increase Quantity indeterminate

c)

Price decrease Quantity increase

d)

Price decrease Quantity indeterminate

e)

Price indeterminate Quantity indeterminate

2.

If labor cost rise in the automobile industry, which of the following will happen to car prices

and the quantity of cars sold?

a)

Price decrease Quantity Sold decrease

b)

Price decrease Quantity Sold increase

c)

Price increase Quantity Sold decrease

d)

Price increase Quantity Sold increase

e)

Price increase Quantity Sold no change

3.

In one fourth of a nation wheat crop is destroyed by a flood in a given season, then the price

of wheat and the Quantity Sold will change in the short run in which of the following ways?

a)

Price decrease Quantity Sold No change

b)

Price decrease Quantity Sold increase

c)

Price increase Quantity Sold decrease

d)

Price increase Quantity Sold increase

e)

Price no change Quantity Sold increase

4.

If there is a decrease in the price of the coffee beans used to make brewed coffee, how will

this affect the equilibrium price and quantity of brewed coffee?

a)

Equilibrium price will decrease and equilibrium quantity will increase

b)

Equilibrium price will decrease and equilibrium quantity will not change

c)

Equilibrium price will decrease and equilibrium quantity will decrease

d)

Equilibrium price will increase and equilibrium quantity will decrease

e)

Equilibrium price will increase and equilibrium quantity will not change

5.

A simultaneous increase for both the demand for the supply of a good in a market will lead to

which of the following changes in the equilibrium price and quantity of the good?

a)

Price increase Quantity increase

b)

Price indeterminate Quantity decrease

c)

Price indeterminate Quantity increase

d)

Price increase Quantity indeterminate

e)

Price decrease Quantity increase

6.

If the product technology of a good improves and at the same time the number of consumers

willing and able to buy the good in the market increases, which of the following will definitely

occur?

a)

Equilibrium price will increase

b)

Equilibrium price will decrease

c)

Equilibrium quantity will increase

d)

Equilibrium quantity will decrease

e)

Equilibrium quantity will remain the same

7.

In the coffee market, which of the following changes will increase the price and decrease the

quantity of coffee?

a)

Supply increase Demand increase

b)

Supply increase Demand decrease

c)

Supply decrease Demand increase

d)

Supply no change Demand increase

e)

Supply decrease Demand no change

8.

To protect high cost domestic producers, a country imposes a tariff on an imported

commodity, Y. Which of the following is most likely to occur in the short run?

1. A decrease in domestic production of Y

2. An increase in domestic production of Y

3. An increase in foreign output of Y

a)

1 only

b)

2 only

c)

3 only

d)

1 and 3 only

e)

2 and 3 only

9.
a)

Price $2.00 Quantity 10,000

b)

Price $1.75 Quantity 15,000

c)

Price $1.50 Quantity 20,000

d)

Price $1.25 Quantity 30,000

e)

Price $0.75 Quantity 5,000.

10.

a)

There is a shortage, and the price will rise

b)

There is a shortage, and the price will fall

c)

There is a surplus, and the price will rise

d)

There is a surplus, and the price will fall

e)

Demand will decrease and the supply will increase

11.

a)

The existing surplus in the market will cause upward pressure on prices until the equilibrium is reached at 75 units

b)

The existing surplus in the market will cause downward pressure on prices until the equilibrium is reached at 60 units

c)

The existing shortage in the market will cause upward pressure on prices until the equilibrium is reached at 30 units

d)

The existing shortage in the market will cause an upward pressure on prices until equilibrium reached at 60 units

e)

The existing shortage in the market will cause downward pressure on prices until equilibrium is reached at 45 units

12.

a)

There will be a surplus of 30 units and 90 units will be exchanged

b)

There will be a surplus of 90 units and 30 units will be exchanged

c)

There will be a surplus of 60 units and 30 units will be exchanged

d)

There will be a shortage of 90 units and 30 units will be exchanged

e)

There will be a shortage of 30 units and 90 units will be exchanged

13.

Which of the following will occur in a competitive market when the price of a good is less

than the equilibrium price?

a)

Price will decrease to eliminate the surplus and restore equilibrium

b)

Price will decrease to eliminate the shortage and restore equilibrium

c)

Price will increase to eliminate the shortage and restore equilibrium

d)

Price will remain use supply will increase to eliminate shortage

14.

Which of the following changes in the supply of and the demand for a good will definitely

result in a decrease in both the equilibrium and quantity of the good?

a)

Supply increase Demand increase

b)

Supply increase Demand no change

c)

Supply no change Demand decrease

d)

Supply decrease Demand increase

e)

Supply decrease Demand decrease

15.

A leftward shift of the supply curve for computers could be caused by which of the following

in the short run?

a)

decreasing the number of computer manufacturers

b)

A decrease in taxes computer manufacturers

c)

A decrease in the price of computers

d)

A decrease in the price of components used to assemble computers

e)

An increase in the price of mobile devices, a substitute good

16.

Which of the following describes the law of supply?

a)

An increase in the price of a good will decrease the quantity demanded.

b)

The price of a good will increase if production input costs decrease.

c)

An increase in taxes will decrease the supply of the good.

d)

An increase in the number of sellers will increase the supply of the good.

e)

An increase in the price of a good will increase the quantity supplied.

17.

Assume that for consumers, pears and apples are substitutes. It is announced that

pesticides used on most apples may be dangerous to consumers’ health. As a result of this

announcement, which of the following market changes is most likely to occur in the short run in

the pear market?

a)

A decrease in supply and an increase in demand

b)

An increase in supply

c)

A decrease in demand

d)

An increase in demand

e)

A decrease in demand and an increase in supply

18.

Comparative advantage implies that

a)

No country should specialize completely in the production of any one good

b)

Every country should try to export more than it imports

c)

Developing countries should import raw materials and export manufactured goods

d)

Two countries should benefit from trade unless both have equal opportunity costs in

every good

e)

Countries should impose tariffs to protect their domestic industries

19.

Which of the following would mostly likely result in a movement downward (between two

points) along a single demand curve?

a)

A decrease in the number of buyers

b)

A decrease in the price of the product

c)

A decrease in the expected future price of the product

d)

An increase in the negative effects of this product on its purchasers

e)

An increase in the use of this product for educational purposes

20.

If the wage rate of workers producing a good decreases, then which of the following will

most likely occur?

a)

The demand curve will shift to the right

b)

The supply of the good will increase

c)

The quantity supplied of the good will decrease

d)

The demand for the good will increase

e)

The quantity demanded for the good will decrease

21.

Which of the following will cause a movement along the demand curve for chicken, a normal

good, resulting in an increase in the quantity demanded?

a)

An increase in consumers’ income

b)

An increase in the price of fish, a substitute good

c)

An increase in the price of barbeque sauce, a complementary good

d)

A decrease in the price of chicken

e)

A decrease in the number of consumers of chicken