1140 Q&B

Question 1

Limited factors in a free-market economy include:

Answer 1

capital
labor
management
natural resources

Question 2

The scarcity of the factors of production results in a scarcity of _______

Answer 2

goods

Question 3

Consumption affects ______, which may increase or decrease when a product is selling well or when it is not.

Answer 3

price

Question 4

Economists are interested in the ______, rather than the _____ of consumers

Answer 4

wants

needs

Question 5

Consumers purchase goods and services that _______________

Answer 5

give them satisfaction

Question 6

Rising prices do what three things?

Answer 6

encourage production because of the expectation of increased profits
notify financial institutions as to which businesses are good risks for capital loans
inform producers that they must increase the supply

Question 7

A company that is not responsive to _____________ may experience failure and bankruptcy

Answer 7

consumer demand

Question 8

consumer evaluation of alternatives is ______________

Answer 8

the basis of trade

Question 9

___________ in a free-market system are determined by the interaction of supply and demand

Answer 9

Prices

Question 10

Factors that influence demand are:

Answer 10

the PRICE of the product or service
the URGENCY of the consumer's need
the SUPPLY of the product or service
the UTILITY of the product or service
consumer INCOME

Question 11

A ____________ is a table listing amounts of a product consumers will purchase at various prices, in a specific market, and at a given point in time.

Answer 11

demand schedule

Question 12

A ________ is a graph showing information from a demand schedule

Answer 12

demand curve

Question 13

A demand schedule is limited because it:

Answer 13

shows a limited amount of selected prices

Question 14

A demand curve illustrates that ____ varies inversely with _______ and shows the principle of ________________

Answer 14

demand
price
diminishing marginal utility

Question 15

As long as only the price of a good or service changes, its demand curve ____________

Answer 15

stays the same

Question 16

4 reasons for a shift in demand

Answer 16

a change in consumer income
a change in the price of alternative choices
a change in consumer expectations
a change in consumer tastes and preferences

Question 17

demand has a negative slope

Answer 17

supply has a positive slope

Question 18

When the level of demand increases, :

Answer 18

the price level increases

Question 19

satisfied by only one price

Answer 19

elastic goods

Question 20

revenue remains the same whether the price increases or decreases

Answer 20

unitary goods

Question 21

supply can be influenced by:

Answer 21

cost of production
time
technology
price

Question 22

Short run- some production factors may be varied.

Long run-all

Answer 22

.

Question 23

_______ is the major influence on supply in the short run, while both _____________ and __________ are long run influences

Answer 23

Price
Cost of production
technology

Question 24

A change in supply is a change in the quantity at different ___________, but it is not a quantity change resulting in a ______________

Answer 24

price levels

change in price

Question 25

The ____________ is the price at which supply and demand are equal

Answer 25

equilibrium

Question 26

The market always tends toward

Answer 26

equilibrium

Question 27

Supply up demand same

Answer 27

price down

Question 28

supply down demand same

Answer 28

price up

Question 29

supply and demand increase or decrease equally

Answer 29

price same

Question 30

demand up more than supply

Answer 30

price up

Question 31

supply up more than demand

Answer 31

price down

Question 32

__________________ occurs when there is a period of perfect inelasticity of supply in which the supplier cannot expand production and the supply is fixed.

Answer 32

Instantaneous equilibrium

Question 33

A supply curve for instantaneous equilibrium is _________

Answer 33

vertical

Question 34

Short run represents __________, and long run equilibrium represents a more _______ supply

Answer 34

an inelastic supply | elastic

Question 35

The two most common floors in the US

Answer 35

minimum wage laws | agricultural price supports

Question 36

Surpluses and shortages are likely to occur when __________________ become a part of the market

Answer 36

government price controls

Question 37

For a good with an elastic demand, a price reduction results in a/an _______ in revenue, and a price increase results in a/an ________.

Answer 37

increase | decrease

Question 38

A free-market economy maximizes _________ and minimizes _____________

Answer 38

individual freedom | state coercion

Question 39

If demand increases more than supply,

Answer 39

both quantity and price increase

Question 40

if supply increases more than demand,

Answer 40

price decreases and quantity increases