Module 3 - MC Questions (Textbook) Flashcards
What is the term for what a buyer pays?
a. Charge
b. Cost
c. Amount
d. Price
d. Price
What does the law of demand state?
a. price decrease = quantity demanded increase
b. price increase = quantity demanded unchanged
c. price increase = quantity demanded decrease
d. price decrease = quantity demanded decrease
c. price increase = quantity demanded decrease
Is supply the same as quantity supplied?
a. yes they mean the same thing
b. supply and quantity supplied both refer to demand
c. they are interchangeable terms
d. no, they are different
d. no, they are different
What does the law of supply state?
a. quantity supplied decreases with demand
b. price increases with quantity demanded
c. demand fluctuates with quantity supplied.
d. quantity supplied increases with price.
d. quantity supplied increased with price
What does the equilibrium price represent?
a. Producers’ supply exceeds consumers’ demand
b. Consumers’ demand excessively surpasses producers’ supply
c. Plans of consumers and producers agree
d. Market experiences a persistent shortage
c. Plans of consumers and producers agree
What do oil companies do in excess demand?
a. Raise prices
b. Lower prices
c. Reduce production
d. Increase imports
a. raise prices
What is the demand shift when the quantity demanded increases at every given price?
a. Leftward shift
b. Rightward shift
c. Upward shift
d. Downward shift
b. Rightward shift
What causes a shift in demand?
a. Increase in product supply
b. Change in underlying factors
c. Constant market trends
d. Constant market trends
b. Change in underlying factors
What is the result of a shift in demand?
a. Different quantity demanded at every price.
b. Increased supply of the good.
c. Higher costs of production.
d. More efficient production methods.
a. Different quantity demanded at every price.
What happens to the demand curve with an increase in income?
a. Shifts left
b. Becomes vertical
c. Becomes horizontal
d. Shifts right
d. Shifts right
Lower costs correspond to?
a. Decreased revenue
b. Reduced expenses
c. Lower income
d. Higher profits
d. Higher profits
What happens when the cost of production increases?
a. Price must increase
b. Price must increase
c. Supply must increase
d. Wages must decrease
a. Price must increase
What do price control laws often lead to?
a. Beneficial outcomes
b. Stable market prices
c. Undesirable consequences
d. Increased production
c. Undesirable consequences
What is a price floor?
a. Lowest legal price
b. Highest permissible price
c. Average market price
d. Minimum selling point
a. Lowest legal price
What is deadweight loss?
a. Gain in consumer surplus
b. Increase in social welfare
c. Loss in social surplus
d. Improvement in market efficiency
c. Loss in social surplus
What does the supply curve show?
a. Price vs. consumer preference
b. Price vs. production cost
c. Price vs. quantity supplied
d. Price vs. demand curve
c. Price vs. quantity supplied
What is the basic principle of the demand and supply model?
a. Supply alone determines price in markets, independent of demand.
b. Demand is irrelevant to price and affects only the quantity produced.
c. Quantity sold in markets is set by government regulations, not by demand and supply.
d. Demand and supply determine price and quantity sold in markets.
d. Demand and supply determine price and quantity sold in markets.
What happens to quantity demanded when price rises?
a. Decreases
b. Increases
c. Remains constant
d. Doubles
a. Decreases
What does quantity demanded refer to?
a. The total number of goods in stock
b. A specific point on the demand curve
c. The sum of all demand in the market
d. The overall slope of the demand curve
b. A specific point on the demand curve
What happens to quantity supplied as price rises?
a. Decreases
b. Remains the same
c. Increases
d. Becomes negative
c. Increases
What is the demand shift when the quantity demanded decreases at every given price?
a. Leftward shift
b. Rightward shift
c. Upward shift
d. Equilibrium shift
a. Leftward shift
What is the effect of an increase in income on the demand for a normal good?
a. Increases
b. Decreases
c. Remains unchanged
d. Fluctuates
a. Increases
What leads to a movement along a demand curve?
a. Shift in technology
b. Change in consumer preferences
c. Change in price
d. Alteration in income level
c. Change in price
Higher costs of production lead to?
a. Increased demand
b. Lower profits
c. Higher subsidies
d. Enhanced innovation
b. Lower profits
What does a shift of supply to the right mean?
a. Lower quantity supplied at all prices
b. Higher quantity demanded at lower prices
c. Higher quantity supplied at all prices
d. Higher quantity supplied at a single price
c. Higher quantity supplied at all prices
What do you obtain by adding the cost of production and desired profit?
a. Final cost
b. Sales value
c. Revenue target
d. Price charged
d. Price charged
What factors change supply?
a. Consumer preferences, population growth, inflation rates
b. Market demand, tax rates, trade policies
c. Cost of inputs, natural disasters, technology, government decisions
d. Interest rates, currency exchange, social trends
c. Cost of inputs, natural disasters, technology, government decisions
Does a price change shift a demand or supply curve?
a. Yes
b. Maybe
c. No
d. Sometimes
c. No
What is a price ceiling?
a. Legal maximum price
b. Authorized highest cost
c. Sanctioned top rate
d. Permitted maximum charge
a. Legal maximum price
What is the best-known example of a price floor?
a. Ceiling rent
b. Minimum wage
c. Sales tax
d. Price cap
b. Minimum wage
What are the main factors that determine what, how, and for whom goods are produced?
a. Land and labor
b. Demand and supply
c. Capital investment
d. Market competition
b. Demand and supply
What does a demand schedule show?
a. Quantity demanded at different prices
b. Supply levels at different market conditions
c. Production costs at various output levels
d. Consumer preferences over time
a. Quantity demanded at different prices
What happens to quantity demanded when price falls?
a. Stays the same
b. Decreases
c. Increases
d. Fluctuates
c. Increases
What does the upward slope of the supply curve illustrate?
a. Law of supply
b. Demand elasticity
c. Market balance
d. Price ceiling
a. Law of supply
What does equilibrium mean?
a. Stability
b. Symmetry
c. Balance
d. Uniformity
c. Balance
What does a shift in supply indicate?
a. Change in demand
b. Stability in prices
c. Fluctuation in interest rates
d. Change in quantity supplied
d. Change in quantity supplied
What was the Green Revolution?
a. Development of solar panels
b. Advancement of mechanical tractors
c. Breeding improved seeds
d. Use of synthetic fertilizers
c. Breeding improved seeds
What factors can affect demand?
a. Weather conditions, geographical location, time of year, cultural beliefs
b. Availability of raw materials, labor costs, production technology, government regulations
c. Income, population, tastes, prices of substitutes/complements, future price expectations
d. Investment trends, interest rates, inflation rates, exchange rates
c. Income, population, tastes, prices of substitutes/complements, future price expectations
What does a demand curve show?
a. Relationship between production cost and selling price
b. Relationship between supply levels and market demand
c. Relationship between consumer preferences and product features
d. Relationship between quantity demanded and price
d. Relationship between quantity demanded and price
What is the law of demand?
a. Inverse relationship between price and quantity demanded
b. Direct relationship between price and quantity demanded
c. Quantity demanded remains constant regardless of price changes
d. Positive relationship between supply and demand
a. Inverse relationship between price and quantity demanded
What is price in economics?
a. Cost incurred per production
b. Total revenue generated
c. Amount received per unit
d. Market value of a company
c. Amount received per unit
What happens to quantity supplied when price increases?
a. Lower quantity supplied
b. Quantity supplied remains unchanged
c. No effect on quantity supplied
d. Higher quantity supplied
d. Higher quantity supplied
What motivates firms in terms of supply?
a. Costs
b. Demands
c. Regulations
d. Profits
d. Profits
How do government policies affect production costs?
a. Through taxes, regulations, subsidies
b. By changing consumer demand, limiting resources, outsourcing advantages
c. By increasing labor supply, decreasing wage rates, improving technology
d. Through import tariffs, export licenses, trade agreements
a. Through taxes, regulations, subsidies
What is the process to see the net effect of economic events?
a. Separate outcomes aggregate
b. Summarize isolated evaluations
c. Combine individual analyses
d. Integrate standalone assessments
c. Combine individual analyses
