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Unit 2 Microeconomics Review

Total questions: 82

Worksheet time: 41mins

Name
Class
Date
1.

Which statement describes the law of demand?

a)

As prices rise, quantity demanded decreases

b)

As prices rise, demand decreases.

c)

As prices fall, quantity demanded decreases.

d)

As prices fall, demand decreases.

2.

Which is an example of the Law of Demand at work?

a)

The price of the pizza goes up when the price of cheese goes up.

b)

Demand for pizza goes down when tacos become more popular

c)

The price of pizza falls when the demand for pizza falls

d)

Demand for pizza rises when the price of pizza falls

3.

What causes a shift in the demand curve?

a)

A decrease in price

b)

An increase in price

c)

A change in an area other than price

d)

A change in price and availability

4.

The amount of a good or service that producers are willing and able to sell at all possible prices during a given period of time.

a)

Supply

b)

Demand

c)

Factor of Production

d)

Production

5.

The market equilibrium price is the price at which

a)

surpluses depress the number of goods supplied

b)

shortages and surpluses will have no effect on the market

c)

the government will not intervene in the market

d)

the quantity demanded is the same as the quantity supplied

6.

What is the Equilibrium Price?

a)

$1

b)

$2

c)

$3

d)

$4

7.

When there is a shortage on iPhones, what will usually happen to the price?

a)

It will increase

b)

It will decrease

c)

It will remain the same

d)

It will hit an equilibrium

8.

The diagram represents a(n)

a)

increase in supply

b)

decrease in supply

c)

change in quantity supplied

d)

none of the above

9.

The diagram represents a

a)

increase in demand

b)

decrease in demand

c)

change in quantity demand

d)

none of the above

10.

When the demand curve shifts to the left, this suggests demand has

a)

increased

b)

decreased

c)

quantity demanded has increased

d)

quantity demanded has decreased

11.

When the demand curve has shifted to the right, this suggests demand has

a)

increased

b)

decreased

c)

quantity demanded has increased

d)

quantity demanded has increased

12.

When price increases, quantity demanded

a)

increases

b)

decreases

c)

supply would decreases, not quantity supplied

d)

supply would increase, not quantity supplied

13.

Much of the tea in the U.K. is imported from India. If wages for Indian tea workers rose, thus increasing input costs, how would this effect supply of tea in the U.K.?

a)

Supply would increase

b)

Supply would decrease

c)

Supply would stay the same

d)

India is not selling tea

14.

If a wave of Peruvian immigrants migrated to South Florida, how might this affect the demand for Peruvian goods in the region?

a)

Demand would increase

b)

Demand would decrease

c)

Demand would be unchanged

d)

Quantity demanded would increase

15.

When the price of Nike brand shoes increases, we will probably go purchase a brand like Adidas or Pumas instead. Which of the following best explains this behavior?

a)

Substitution Effect

b)

Income Effect

c)

Complement Goods

d)

Consumer expectations

16.

If input costs increase, what will a producer have to do to avoid losing revenue?

a)

Raise price

b)

Lower Price

c)

Decrease supply

d)

Increase supply

17.

If you are going to buy a new bed mattress, and the salesman tells you there will actually be a sale on mattresses in a week, what will that do to your demand for mattresses in that moment?

a)

Decrease

b)

Increase

c)

Stay the same

d)

Buy more right now

18.

When the price of something increases, the quantity demanded

a)

Increases

b)

Stays the same

c)

Decreases

d)

Reverses

19.

Which is most likely a complement to an iPhone?

a)

DVD's

b)

speakers

c)

apps

d)

pencils

20.

Which of these BEST describes the influence of high prices on the behavior of consumers?

a)

They are an incentive for consumers to buy less

b)

They encourage consumers to modify their supply schedules

c)

They are an incentive for consumers to buy more

d)

They have no effect on Consumers

21.

New technology can _______

a)

Both lower production costs and increase productivity

b)

None of these is correct

c)

lower production costs

d)

increase productivity

22.

The supply of goods matches the demand of goods

a)

surplus

b)

demand curve

c)

equilibrium price

d)

shortage

23.

A sum of money granted by the government to a business is known as a ____

a)

shortage

b)

surplus

c)

subsidy

d)

price

24.
This part of the market determines DEMAND
a)
buyers
b)
sellers
c)
suppliers
d)
store owners
25.
This part of the market determines SUPPLY
a)
buyers
b)
sellers
c)
consumers
d)
us
26.
What does this curve represent?
a)
supply
b)
equilibrium
c)
demand
d)
surplus
27.
Goods that are bought and used together are 
a)
complementary goods
b)
substitute goods
c)
income goods
d)
unrelated goods
28.
Thousands of people leave a small town due to a factory closing down.  Sales at the local grocery store become slow. What causes this change?
a)
Prices or availability of substitutes
b)
Prices or availability of complementary goods
c)
Change in the weather or season
d)
Change in the number of buyers
29.
Which of the following is likely to increase the demand for peanut butter?
a)
Fewer children in the population
b)
News that insects have destroyed much of the peanut crop and that there will be less peanut butter on the shelves in three months.
c)
A big increase in the price of jelly.
d)
A report from the Surgeon General of the United States that eating peanut butter makes people nutty.
30.

If a price is above equilibrium price, it creates a...

a)

shortage

b)

surplus

c)

market price

d)

demand

31.

If a price is below the equilibrium price it creates a...

a)

shortage

b)

surplus

c)

market price

d)

supply

32.

A place where buyers and sellers of a particular good or service interact

a)

Supply

b)

Demand

c)

Agency

d)

Market

33.

How does the following situation SHIFT the demand curve for tea? There is a widely publicized study explaining the health benefits of tea.

a)

It shifts the demand curve left

b)

It shifts the demand curve right

c)

It does not shift the demand curve

d)

It only shifts the supply curve

34.

Refer to the graph. The equilibrium price and quantity for this product will be:

a)

$60 and 2,600

b)

$100 and 1,000

c)

$30 and 1,000

d)

$100 and 5.000

e)

$30 and 5,000

35.

When the demand for a product is higher than the supply, this causes what?

a)

a surplus

b)

a shortage

c)

equilibrium

36.

When the supply for a product is higher than the demand this causes what?

a)

a surplus

b)

equilibrium

c)

a shortage

37.

Monopolies are considered harmful to consumers because

a)

they can charge high prices for their goods

b)

they pay their employees less than other businesses

c)

they move factories to other countries

d)

they use false advertising

38.

Perfect competition is a market structure in which _______ businesses sell ______ products

a)

no, any

b)

some, similar

c)

many, the same

d)

few, many

39.

In which market structure are products similar but differentiated (through branding, quality, etc.)?

a)

perfect competition

b)

monopolistic competition

c)

monopoly

d)

oligopoly

40.

Which market structure provides the lowest prices for consumers?

a)

monopoly

b)

monopolistic competition

c)

oligopoly

d)

perfect competition

41.

An oligopoly can be described as an industry in which

a)

one company produces most of the output

b)

2 companies produce most of the output

c)

a handful of companies produce most of the output

d)

a large number of companies produce most of the output

42.

Three companies control almost 70% of the cereal market. This means the market structure of the cereal industry is:

a)

an oligopoly

b)

a monopoly

c)

monopolistic competition

d)

perfect competition

43.

In which market structure does a business have total control over price?

a)

perfect competition

b)

oligopoly

c)

monopolistic competition

d)

monopoly

44.

Which of the following is NOT an example of a natural monopoly?

a)

cell phone company

b)

power company

c)

postal service

d)

water company

45.

Tara has opened a Chinese  restaurant.  She serves the same  food as other Chinese  

restaurants, but offers free  meals to kids in order to stand  out from the competition.  The  barriers to entry in starting the  restaurant are low and she has a  little control over price.  Which type of market structure is  Tara’s business a part of?

a)

monopolistic competition

b)

monopoly

c)

perfect competition

d)

oligopoly

46.

This market structure has many firms, identical products, no barriers to entry, & price takers

a)

Perfect Competition

b)

Monopoly

c)

Oligopoly

d)

Cartel

47.

This market has some 25-75 firms selling slightly differentiated products, some price control, & low barriers to entry

a)

Oligopoly

b)

Monopoly

c)

Perfect Competition

d)

Monopolistic Competition

48.

In this market, 2-24 firms control the market, products can be slightly differentiated, there are high barriers to entry, & lots of control over price

a)

Monopoly

b)

Oligopoly

c)

Perfect Competition

d)

Cartel

49.

A formal organization of producers that agree to coordinate prices and production...

a)

Monopoly

b)

Oligopoly

c)

Perfect Competition

d)

Cartel

50.

The broccoli market would be an example of...

a)

Monopolistic Competition

b)

Perfect Competition

c)

Monopoly

d)

Oligopoly

51.

Rubik's Cubes would be an example of...

a)

Perfect Competition

b)

Oligopoly

c)

Monopoly

d)

Monopolistic Competition

52.

Levi's jeans are part of...

a)

a monopoly

b)

an oligopoly

c)

Monopolistic Competition

d)

Perfect Competition

53.

Berkmar High School is an example of...

a)

perfect competition

b)

monopoly

c)

oligopoly

d)

monopolistic competition

54.

Ford Motor Company is an example of...

a)

monopoly

b)

oligopoly

c)

monopolistic competition

d)

perfect competition

55.

Subway is an example of...

a)

monopoly

b)

oligopoly

c)

monopolistic competition

d)

perfect competition

56.

Bucket hats are an example of...

a)

perfect competition

b)

monopoly

c)

oligopoly

d)

monopolistic competition

57.

Comcast is an example of...

a)

Perfect Competition

b)

Monopoly

c)

Oligopoly

d)

Monopolistic Competition

58.
A form of business organization with one owner who takes all the risks and all the profit is called - 
a)

partnership

b)

proprietorship

c)

corporation

d)

governorship

59.
A form of business organization with two or more owners who share the risks and the profits - 
a)

proprietorship

b)

corporation

c)

wholesale

d)

partnership

60.
A form of business organization that is authorized to act as a legal entity regardless of the number of owners. 
a)

corporation 

b)

sole proprietorship

c)

partnership

d)

distributor

61.
What kind of business is BEST described by these statements?
I am the only owner of my business. 
I take all the risks of doing business. 
I keep all the profits. 
a)

sole proprietorship

b)

corporation

c)

partnership

d)

cooperative

62.
What is a disadvantage of partnerships?
a)

ease of formation

b)

owners share responsibilities

c)

limited liability

d)

possibility of personality conflict

63.
How are sole proprietorships and partnerships alike?
a)

Contracts are needed to start the businesses.

b)

Owners have complete control of the business.

c)

Owners have limited legal liability.

d)

The businesses are owned by one person.

64.
How is a corporation different from a sole proprietorship?
a)

Corporations are owned by only one person

b)

Corporations can sell stock to raise money for the business. 

c)

Sole proprietorships have limited liability for the owners.

d)

Sole proprietorships require a legal charter to start the business.

65.

What percentage of the profits in sole proprietorship is the owner designated to?

a)

75%

b)

100%

c)

54%

d)

0%

66.

Business owned by shareholders is

a)

Partnership

b)

Sole proprietorship

c)

Corporation

d)

Franchise

67.
What do we call a person who is willing to take the risks of starting a business in order to make a profit?
a)

Proprieter

b)

Partner

c)

Entrepreneur

d)

Incorporater

68.

Walmart is an example of a:

a)

single owner

b)

partnership

c)

corporation

d)

non-profit

69.

A father who wants to take his son into the business with him should form a......

a)

non-profit

b)

franchise

c)

corporation

d)

partnership

70.

Someone who wants to control all aspects of the business should form this type of business.

a)

non-profit

b)

partnership

c)

sole proprietorship

d)

franchise

71.

What is a corporation?

a)

A corporation is a type of vehicle.

b)

A corporation is a legal entity formed to conduct business.

c)

A corporation is a type of animal.

d)

A corporation is a type of fruit.

72.

What is a sole proprietorship?

a)

A sole proprietorship is a type of business structure where a single individual owns and operates the business.

b)

A sole proprietorship is a type of business structure where the business is owned by a corporation.

c)

A sole proprietorship is a type of business structure where multiple individuals own and operate the business.

d)

A sole proprietorship is a type of business structure where the business is owned by the government.

73.

What is a partnership?

a)

A partnership is a business structure where two or more individuals or entities come together to carry out a business venture and share the profits and losses.

b)

A partnership is a business structure where individuals or entities do not come together to carry out a business venture.

c)

A partnership is a business structure where individuals or entities do not share the profits and losses.

d)

A partnership is a business structure where only one individual or entity carries out a business venture.

74.

Business owned by shareholders is

a)

Partnership

b)

Sole proprietorship

c)

Corporation

d)

Franchise

75.

Marco's computer repair business has limited financial resources. What type of business is it?

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

76.

When Luigi's Pizzeria went out of business, he was still responsible for paying all of the restaurant's bills. What type of business did he have?

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

77.

Louise and Susan are meeting to plan a new advertising campaign for the town newspaper they own. What type of business do they have?

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

78.

Maria is using her savings to open a shop selling clothing from Mexico. What type of business is it?

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

79.

Google, Amazon, and Facebook are examples of...

a)

Sole Proprietorships

b)

Partnerships

c)

Corporations

80.

Tracey and Doug's Dog Wash Boutique is probably an example of a...

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

81.
Which type of business structure is the most common type of business in the U.S.A.?
a)
Corporation
b)
Sole Proprietorship
c)
Partnership
d)
LLC
82.
Which of the following types of ownership can sell stock?
a)
Proprietorship 
b)
Partnership 
c)
Corporation 

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