Unit 3 Test

Question 1

Which is shown by the intersection of the supply curve and the demand curve?

Answer 1

equilibrium price of a good or service

Question 2

Which accurately describes a shortage?

Answer 2

Consumer demand for a certain car is greater than the number of cars that can be produced.

Question 3

In which situation would the price of a good be most likely to increase?

Answer 3

An increase in production costs results from a rise in wages.

Question 4

When someone buys a fourth television for his or her house, what is the result?

Answer 4

decrease in the marginal utility of the television

Question 5

Which accurately describes a situation in which substitution occurs?

Answer 5

A restaurant starts using margarine instead of butter because butter becomes more expensive.

Question 6

Which is a trait of public goods?

Answer 6

nonexcludability

Question 7

Which is not a major factor in determining thee level of wages?

Answer 7

level of production costs

Question 8

Which limits the freedom of workers in the labor market?

Answer 8

inflexibility of the work force

Question 9

Immigration can result in an increase in the supply of labor. Therefore, which can be a result of immigration?

Answer 9

general decrease in wages

Question 10

Which leads to an increase in bargaining power for workers?

Answer 10

existence of unions

Question 11

Which is intended to demonstrate to an employer the importance of cooperating with workers?

Answer 11

work slowdown.

Question 12

Which has led to greater competition among workers looking for jobs?

Answer 12

globalization

Question 13

Which is an example of a protectionist policy?

Answer 13

limiting the number of foreign cars that can be sold in the United States

Question 14

Which housing decision provides a person with both housing and an investment?

Answer 14

buying a single-family home

Question 15

Which commodity has the most inelastic supply?

Answer 15

housing

Question 16

The selling price of houses is most likely to increase after a drop in which area?

Answer 16

mortgage interest rates

Question 17

Which is most likely to result from a rapid increase in the population of a city or town?

Answer 17

seller’s market

Question 18

Which gives people access to both high-paying jobs and more living space?

Answer 18

suburbs

Question 19

Which is measured by a calculation of the amount of goods and services the average person can afford to buy?

Answer 19

standard of living

Question 20

Which is most likely to create new markets?

Answer 20

free trade

Question 21

Which best describes the effect of a tariff on the import of cars from a foreign country?

Answer 21

Foreign cars become more expensive.

Question 22

Which leads to the end of a boom period in the business cycle?

Answer 22

reduction in consumer demand resulting from inflation

Question 23

Which is the cause of demand-pull inflation?

Answer 23

Consumers want more and more goods and services.

Question 24

Which is an example of a fiscal policy?

Answer 24

raising taxes in order to cover a budget deficit

Question 25

Which results from a large company’s ability to take advantage of economies of scale?

Answer 25

The company can offer goods more cheaply than smaller retailers.