A music store holds a half-price sale on all CDs. During the sale, people buy more CDs than usual. What does this event show? a. inelasticity of demand c. the law of demand b. the substitution effect d. a demand schedule
What stays the same when you change an individual demand schedule into a market demand schedule for the same product? a. price of the product c. number of consumers b. demand curve d. quantity demanded
A restaurant owner has not changed menu prices in a year. One month ago, the owner noticed that sales had fallen by 50 percent. Which of the following most likely caused the demand curve to shift? a. Area population increased. b. Gas prices decreased. c. A nearby factory shut down. d. A local newspaper praised the restaurant’s food.
The price of home computers rises. According to the law of supply, manufacturers will respond to this price increase by • increasing computer production. b. halting computer production. • decreasing computer production. • keeping computer production steady.
Farmer Brown has ten dairy cows. Her feed costs go up, but milk production stays the same. What effect will this have on her supply? a. None, although she will raise prices to make up the lost revenue. b. Her supply will go down, because her fixed costs have risen. c. Her supply will go up, because she won’t sell as much milk. d. Supply will remain the same, but she will have to sell more.
Which goods would be included in the calculation of GDP? a. toys made in China at a factory owned by a U.S. company b. cars made in Ohio at a factory owned by a Japanese car company c. plastic made in Kentucky and sold to a toy maker in Hawai’i d. cloth made in India and sold to clothes makers in the U.S.
Which of these is a limitation of GDP? a. It does not include government goods and services. b. It does not measure a country’s well-being. c. It does not measure the success of a country’s economy. d. It does not include goods that are exported
Which shows depreciation? a. A store owner lowers the price of a swimsuit by $10. b. After 180,000 miles of driving, a truck is worth less than when it was purchased. c. An employer refuses to pay for training for his employees. d. A company’s stock loses value when profits fall.
What is considered a normal unemployment rate? a. 0 to 2 percent c. 8 to 10 percent b. 4 to 6 percent d. 10 to 12 percent
Which items does the consumer price index measure? a. nonfood items purchased by adult consumers b. food items purchased by rural families c. goods and services purchased by an urban consumer d. food and necessary services for any family
Which of the following people is underemployed? a. Frank is unemployed, but he has stopped looking for a job. b. Mary is looking for work in a law office. c. Carlos is not earning as much money as he really needs. d. Rochelle has a college degree, but she is working in a low-skill job.
Jessie’s grandfather tells him that a dollar went farther when he was a child than it does today. What does he mean? a. Currency was more durable when he was young. b. A dollar had more purchasing power when he was young. c. People today do not take care of their money. d. U.S. currency is used in more countries today.
Which person is most likely to be described as “working poor”? a. Dolores, who has an advanced degree and works 40 hours a week b. Jason, who works part-time so he can start a real estate business c. Jim, a full-time student with a job in the college library d. Deb, a single mother who works part-time at minimum wage
Jessica has an advanced degree in chemistry. However, a laboratory will not hire her until she learns how to use the latest software.Which of these conditions describes Jessica’s situation? • seasonal unemployment b. structural unemployment c. frictional unemployment d. underemployment
Whom does the government consider to be poor? a. families whose income level does not support their household b. single-parent households in urban areas c. inner-city residents who live in poor neighborhoods d. individuals who work at minimum-wage jobs
Summer causes demand for ice cream to go up. What happens next? • Ice cream factory workers strike. • Factories make less ice cream. c. Ice cream makers raise prices. d. Stores import ice cream.
A factory makes pencils. New machines in the factory make it faster and cheaper to make pencils. What will happen next? a. Costs will drop, but supply will remain the same. b. Supply and costs will both decrease. c. Costs will go down and supply will go up. d. At first, supply will rise, but then it will decrease.
Why does an economist create a market demand schedule? a. to learn what demands the market will make under unusual conditions b. to have an idea of how a market would change if conditions in an area changed c. to predict how people will change their buying habits when prices change d. to show how various conditions can change the demand for a good
The dollar value of all final goods & services produced within a country’s borders in a given year.
Government intervention in a market that affects the production of a good
Chart that lists how much of a good a supplier will offer at various price levels.
When people and nations depend on one another for the goods and services they want.