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Economics Review. Chapter 4-7. When the government sets a maximum price that sellers may charge for a product , this is an example of what?. price ceiling price floor price adjustment. You have recently received a raise at work, which of the following factors would this change ?.

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Economics Review

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Economics Review

Chapter 4-7


When the government sets a maximum price that sellers may charge for a product, this is an example of what?

  • price ceiling

  • price floor

  • price adjustment


You have recently received a raise at work, which of the following factors would this change?

  • market size

  • consumer taste

  • income


The law of demand states that:

  • consumers will demand more at low prices and less at high prices

  • consumers will demand more at low prices and more at high prices

  • consumers will provide less at low prices and more at high prices


You decide to eat a candy bar, and then you decide to eat a secondbut it doesn’t taste as good. Which economic law are you experiencing?

  • substitution effect

  • elasticity

  • diminishing marginal utility


Why are gas and salt considered demand inelastic?

  • there are no substitutes

  • law of marginal utility

  • they are complementary goods


Which of the following is an example of a shortage?

  • quantity supplied is greater than quantity demanded

  • quantity supplied is less than quantity demanded

  • quantity supplied is equal to quantity demanded


If the price of Pepsi increases, and you purchase Kool-Aid instead, this is an example of?

  • consumer expectations

  • variable costs

  • substitute goods


If you purchase an item that is considered demand elastic, what does that mean?

  • quantity demanded is equal to quantity supplied

  • quantity demanded changes significantly as price changes

  • quantity demanded changes very little as price changes


Which of the following companies best illustrates a monopoly?

  • Wal-Mart

  • Exxon-Mobile

  • DeBeersDiamonds


The law of supply states that:

  • Businesses will provide more products at higher prices and fewer at lower prices

  • Businesses will provide fewer products at higher prices and more at lower prices

  • Consumers will purchase fewer products when they must buy them at higher prices


Economists predict that Madison County will reach a population of 90 thousand by 2015. Which demand factor would this influence?

  • income

  • market size

  • consumer taste


Having a worker work on a particular aspect of production is an example of?

  • specialization

  • increasing returns

  • diminishing returns


Which of the following is not a factor in the “Costs of Production”?

  • specialization

  • increasing returns

  • diminishing returns

  • government action


Which of the following statements best explains the concept of a monopoly?

  • There is only one seller of a product that has several substitutes

  • There is more than one seller of a product that has no close substitute

  • There is only one seller of a product that has no close substitute


Fixed costs occur no matter how much a company produces, which of the following would be an example of this?

  • cost of materials

  • shipping

  • mortgages on buildings


If you were to hire more workers and they cause more total output, which of the following is this an example of?

  • increasing returns

  • diminishing returns

  • marginal utility


When a sports team limits rivals from creating a team in their general area is an example of what type of monopoly?

  • government

  • technological

  • geographical


If the government does not want consumers to produce or consume a good, what can they implement to discourage usage?

  • IRA

  • subsidy

  • excise tax


If you hire too many workers and it causes your production to decrease, which of the following is this an example of?

  • increasing returns

  • diminishing returns

  • shipping


You manufacture cereal that uses raisins, unfortunately the price of raisins increases dramatically, which of the following factors will change supply?

  • input costs

  • labor productivity

  • producer expectation


The usage of robots to manufacture automobiles is an example of what?

  • input costs

  • labor productivity

  • technology


The type of clothes that you purchased three years ago are no longer popular and in demand, why is that?

  • market size

  • consumer tastes

  • consumer expectation


When the government pays for part of the cost of a good or service to encourage production and consumption, this is an example of?

  • IRA

  • subsidy

  • excise tax


When a business lowers their prices below rival businesses prices, this is an example of?

  • input costs

  • market size

  • competitive pricing


What is it called when the government pays for part of the cost of a good or service to encourage production and consumption of a good or service?

  • revenue

  • subsidy

  • excise


Which of the following scenarios would justify government rationing?

  • nation at war

  • flood in the Midwest

  • drought in the deep south


When does the market experience equilibrium?

  • when quantity demanded is more than quantity supplied

  • when quantity demanded is less than quantity supplied

  • when quantity demanded is equal to quantity supplied


Which of the following is an example of a surplus?

  • quantity supplied is greater than quantity demanded

  • quantity supplied is less than quantity demanded

  • quantity supplied is equal to quantity demanded


Who benefits the most from a surplus?

  • producers

  • suppliers

  • customers


When the government sets a price floor, what occurs?

  • shortage occurs because it is set below equilibrium price

  • shortage occurs because it is set above equilibrium price

  • surplus occurs because it is set above equilibrium price


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