4-6 Test Econ

What is the relationship between income and demand?

An increase in income increases demand.

A change in quantity demanded is represented by

Movement along the demand curve.

Why does an increase in gas prices lead to less consumer spending on other items?

The demand for gas is largely inelastic.

To determine elasticity, which question would an economist ask?

What portion of the consumer's income is required for the purchase?

Which of these events sparked the most extensive rationing in United States history?

World War II

What is a subsidy?

a government payment to encourage or protect a certain economic activity

Which of these is the most likely to create a shortage of an item?

a price ceiling

Which of these is the most likely to create a surplus of an item?

a price floor

For which product is demand likely to be the most elastic?

a product with many adequate substitutes

Which of these best describes prices in a market economy?

a set of compromises between buyers and sellers

Which of these tends to force the price of an item upward?

a shortage of that item

Which of these tends to force the price of an item downward?

a surplus of that item

Which of these is a major problem in the execution of a rationing system?

administrative expense

Which is a likely complement to a tablet computer?

apps

Prices for common vegetables tend to be elastic. Why?

because other vegetables are available

How does the government ensure that farmers receive a target price for their goods?

by granting them nonrecourse loans

What is the main cause of a change in quantity demanded?

change in price

______ are products that are related in such a way that an increase in the price of one reduces the demand for both.

complements

provides

contributes

An economist performs a total expenditures test and finds that a change in price and a change in revenue move in opposite directions and concludes that the test shows ____

demand is elastic.

As individuals use a product more, they begin to encounter __________ , resulting in a decline of extra satisfaction.

diminishing marginal utility

The shape of the line on a supply curve graph shows the quantities of product supplied on the basis of what?

every possible price for the product in the market

Which of these describes the process of an item finding its economic equilibrium?

fluctuation

produces

generates

assumed

hypothetical

In economic terms, the extra output due to the addition of one more unit of product output is referred to as ________.

marginal product

Economists look at the ____________ of the demand for a product in order to understand how a dependent variable, such as quantity, responds to a change in an independent variable, such as price.

market demand curve

When studying _____________ , individuals look at the behavior and decision-making by individuals, such as people or firms.

microeconomics

Which of these names something that can raise the prices of an item above its equilibrium price?

perceived value

Which rationing method was instituted for gasoline in the mid-1970s?

purchasing days determined by license plate numbers

________ are competing products that can be used in place of one another.

substitutes

Which of these best describes an economic process similar to "haggling"?

supply and demand

Who among the following benefits the most from rent control?

tenants in rent-controlled apartments

Which of the following replaces a costly item with a less costly one?

the substitution effect

Which of these describes the effects of price floors on the U. S. sugar industry?

they helped sugar farmers while increasing the price of sugar for the consumer

Which term refers to a changing price that causes a proportional change in total revenue?

unit elastic

different

various