Unit 3 Econ

You live in a planned economy and want to open a business. The _____ decides how to allocate the productive resources. A. central authority B. market

A. central authority

At the grocery store, you learn that the price of butter has increased by a lot. Many people respond by buying margarine. This makes the demand for butter _____ and the demand for margarine _____. A. decrease, increase B. increase, decrease C. stay the same, stay the same

A. decrease, increase

You just went into the cookie business. To determine a price for your cookies, you calculate your _____. A. input costs B. preferences C. climate

A. input costs

You pay $50 to buy a new pair of shoes. The shoes cost the producer $75 to make. This means that the producer is _____. A. losing money B. earning a profit C. just covering costs

A. losing money

There were two shoe stores in town, but you decided to open another shoe store. More sellers in the market means _____ competition. A. more B. less

A. more

When you begin working, you will most likely be both a _____ and a _____ in a market economy. A. producer, consumer B. single seller, competitor C. central authority, consumer

A. producer, consumer

You have a business that is dependent on gas. The price of oil increases significantly. As a result, you will _____ the price of your product. A. raise B. lower C. not change

A. raise

Consumers demand more shoes than sellers are willing to supply, at the given price. This means that there is a(n) _____ of shoes. A. surplus B. shortage C. equilibrium

B. shortage

People are demanding more apartments than sellers are willing to offer. This means that there is a _____ of apartments. A. surplus B. shortage C. minimum quantity

B. shortage

Minimum wage and farming price control are examples of _____. A. market-clearing prices B. price ceilings C. price floors

C. price floors

Rent control, which sets apartment rents below the equilibrium price, is an example of a ______________.

price ceiling

As the only clothes producer, you will not have _____. A. competition B. profits C. production costs

A. competition

The grocery store wants to increase the demand for ice cream cones, so it puts ice cream on sale. This shows that the grocery store owner thinks that ice cream and ice cream cones are _____. A. complements B. substitutes C. unrelated

A. complements

Your friend bought a new pair of jeans. The pair of jeans _____ as demand for your friend. A. counts B. does not count

A. counts

At a price of $50, consumers demand 1,000 pair of shoes, and sellers supply 500 pairs of shoes. At $50, there is _____. A. excess demand (demand is greater than supply) B. excess supply (supply is greater than demand) C. no excess supply or demand

A. excess demand (demand is greater than supply)

A supply curve for the car industry would show that automakers supply the most cars at the _____ price. A. highest B. lowest C. marginal

A. highest

Fifty new food businesses have entered the food market. The supply of food at each price level will _____. A. increase B. decrease C. stay the same

A. increase

If the price of butter increases, then the demand for margarine will likely _____. A. increase B. decrease

A. increase

The price of a popular cereal was just reduced. This will most likely _____ the demand for the cereal. A. increase B. decrease C. keep constant

A. increase

You produce clothing, and the price of cotton just increased by a lot. As a result, you will most likely _____ your prices. A. raise B. lower C. not change

A. raise

You own a pizza store in town. Another pizza store would be your competition because it offers _____ products. A. similar B. different

A. similar

Margarine and butter are examples of _____. A. substitutes B. complements

A. substitutes

Cell phone producers are supplying more phones than consumers demand, at the given price. This means that there is a _____ of phones. A. surplus B. shortage C. collusion

A. surplus

There are more jeans in the stores than consumers are willing to buy, at the given price. This means that there is a _____ of jeans. A. surplus B. shortage C. maximum quantity

A. surplus

Select all that apply. Select all the items that describe price. A. what a producer receives from selling a good B. what a consumer pays when buying a good C. the distribution method in a planned economy D. the distribution method in a market economy

A. what a producer receives from selling a good B. what a consumer pays when buying a good D. the distribution method in a market economy

The cost of making one cookie is $1.00, and the market price for a cookie is 50 cents. At this price, you would supply _____ cookie(s). A. zero B. many C. only one

A. zero

For several years in the late twentieth century, the government set the price of gasoline below the equilibrium price. This is an example of a _____. A. price floor B. price ceiling C. tax

B. price ceiling

When the government sets a price for wheat that is above the equilibrium price, it is imposing a _____. A. price ceiling B. price floor C. market price

B. price floor

In a market economy, market prices are determined through buying and _____ decisions. A. government B. selling C. consuming

B. selling

The cost of producing a new watch is $50. At a price of $100, watches will most likely be _____ and _____. A. bought and purchased B. supplied and demanded C. made and produced

B. supplied and demanded

At a product's lowest price, you would expect people to demand the ______ of that product.

most

You produce video games. It costs you $35 to make each game. You want to charge at least _____ to cover your costs. A. $25.00 B. $45.00 C. $35.00

C. $35.00

If the marginal cost of making a good is $3.00, then you would supply the good if the price was _____. A. $1.00 B. $2.00 C. $4.00

C. $4.00

You are in the airline business. The price of oil just doubled. How will this most likely affect the price of your airline tickets? A. The price will stay the same. B. The price will decrease. C. The price will increase.

C. The price will increase.

Sixty new grocery stores opened. This will ___________ both the price and quantity of food in the marketplace.

affect

ABC Software charges a price for its video games that maximizes its profits. This company most likely functions in a _______________ market.

single-seller

Many people in the town of Oldenburg moved to find jobs in other cities. This led to a population decrease and a(n) ______________ in the demand for food.

decrease

When the light bulb industry went from being a single-seller market to a competitive market, the price of light bulbs ______________.

decreased

Supply for clothing decreased, which means that suppliers will now supply _________ clothes at each price level.

fewer

The price of your favorite soft drink just became lower. This means that you are likely to buy ___________ of the drink.

more

The cost of making a new skirt is $20. At a price of $15, consumers will demand 600 skirts, and producers will ________________ skirts.

not supply

When Edison Electric Company and the Thomson-Houston Electric Company engaged in collusion, the two companies ________________ the level of competition in their industry.

reduced

You supply a good at a price of $5. You also earn a profit at this price. This means that your marginal cost could be _____. A.$10.00 B. $2.00 C. $5.00

B. $2.00

You want to make a profit selling your new computer game. If it costs $30 to make the game, what price might you charge? A. $25 B. $40 C. $30

B. $40

Your friend is a business owner in a planned economy. What decides how to allocate the productive resources he uses? A. price B. central authority

B. central authority

The main factors that determine quantity supplied are price and _____. A. consumers' preferences B. costs of productive resources C. population growth

B. costs of productive resources

The ABC furniture store has salespeople who are friendly and helpful. This store provides good _____. A. products B. customer service C. options

B. customer service

An oil refinery makes both gasoline and diesel fuel. The price of gas has increased, which means that the supply of diesel fuel will most likely _____. A. increase B. decrease C. stay the same

B. decrease

Consumers' incomes decrease, which causes a decrease in demand. This causes the equilibrium price to _____. A. increase B. decrease C. stay the same

B. decrease

One hundred clothing stores go out of business. This will _____ the supply of clothes at each price level. A. increase B. decrease

B. decrease

The population in a coastal town decreased last year. As a result, local store owners noticed a(n) _____ in the quantity demanded of goods and services. A. increase B. decrease

B. decrease

Your business is dependent on gas to transport its goods. The price of oil decreases, which means your production costs _____. A. increase B. decrease C. stay the same

B. decrease

You like the latest laptop, but you cannot afford it. The new laptop _____ as demand for you. A. counts B. does not count

B. does not count

At a price of $65, consumers demand 650 pairs of shoes, and sellers supply 650 pairs of shoes. The price of $65 (where quantity supplied and quantity demanded both equal 650 pairs of shoes) is the _____. A. excess price B. equilibrium price C. quantity price

B. equilibrium price

In a free market economy, the decisions made by buyers and sellers push the price of a good or service toward the _____. A. price ceiling B. equilibrium price C. price floor

B. equilibrium price

At a price of $100, consumers demand 450 pairs of shoes, and sellers supply 800 pairs of shoes. At $100, there is _____. A. excess demand (demand is greater than supply) B. excess supply (supply is greater than demand) C. no excess supply or demand

B. excess supply (supply is greater than demand)

The price of gas increased, which means _____ people will buy gas in the future. A. more B. fewer

B. fewer

The price of paper increases by a lot. Book producers respond by supplying _____ books. A. more B. fewer C. the same

B. fewer

The decision by shoe store owners to fix their prices will result in consumers paying _____ prices. A. lower B. higher C. the same

B. higher

You are willing to supply the most cookies at the _____ price, and consumers will demand the most cookies at the _____ price. A. lowest, highest B. highest, lowest C. highest, highest

B. highest, lowest

The airline industry and the oil industry are an example of interrelated markets. This means that a change in the price of oil _____ the price of airline tickets. A. does not change B. influences C. is not related to

B. influences

At the highest price, you would expect the demand for goods and services to be the _____. A. most B. least

B. least

A farmer produces both corn and wheat. If the price of corn increases, the farmer will supply _____ wheat. A. more B. less C. the same amount of

B. less

If a lot of people buy shoes from your competition, this will encourage you to _____ prices. A. raise B. lower C. keep constant

B. lower

You produce a new graphic T-shirt and decide to charge a price of $50. No one is buying the shirts. This signals you to _____. A. raise the shirt's price B. lower the shirt's price C. not change the shirt's price

B. lower the shirt's price

You decided to charge $100 for your new computer game, but people are not buying it. What could you do to encourage people to buy your game? A. raise your price to $150 B. lower your price to $75 C. keep the price at $100

B. lower your price to $75

Your friend produces go-carts (made using steel). The price of steel decreases. As a result, your friend _____ his prices. A. raises B. lowers C. does not change

B. lowers

You are the only clothes producer in the industry. You can choose a price that _____. A. reduces your revenue B. maximizes your profits C. lowers your costs

B. maximizes your profits

You find a way to lower your production costs. Now your marginal cost of making a cookie is only 25 cents. At the market price of 50 cents, you _____ supply cookies and _____ a profit. A. will, will not earn B. will, will earn C. will not, will not earn

B. will, will earn

You charge $60 for a new pair of shoes, and your competition charges $45 for the same pair of shoes. Who will a consumer most likely buy from? A. your store B. your competition

B. your competition

You and a friend go clothes shopping and find a great pair of jeans. They fit you perfectly, but they also cost $100. You are willing to buy them, but you only have $50 in your wallet to spend on new clothes. Your friend likes the jeans and has the money to buy them. The jeans would count as a demand for _____. A. you, because you are willing to buy them and they fit you perfectly B. your friend, because he likes the jeans and has the money to buy them C.both of you, because you both like the jeans

B. your friend, because he likes the jeans and has the money to buy them

Competition in the cell phone market results in _____. A. poor customer service B. higher cell phone prices C. better quality cell phones

C. better quality cell phones

The price of televisions decreased, which means the demand for _____ will most likely increase. A. computers B. music players C. cable service

C. cable service

You and the other shoe store owners decide to fix your shoe prices at $60 a pair in order to maximize your profits. This is called _____. A. a market price B. competition C. collusion

C. collusion

You go clothes shopping and find a great pair of jeans. They fit you perfectly, but they also cost $100. You are willing to buy them, but you only have $50 in your wallet to spend on new clothes. The pair of jeans _____ as demand for you. A. count B. might count C. do not count

C. do not count

Suppose the other shoe stores are selling shoes that are not made well. But your shoes last a long time. Soon, almost everyone in town is buying shoes from you. This encourages your competitors to _____ the quality of their shoes. A. maintain B. reduce C. improve

C. improve

You just received a raise at work and consider meat a normal good. This means that your demand for meat will _____. A. stay the same B. decrease C. increase

C. increase

The price of gas just increased. This will most likely make people buy _____ gas in the future. A. the same amount of B. more C. less

C. less

A producer charges $500 for a cell phone, but buyers are not buying any cell phones at this price. So at this price, the producer is willing to supply _____ phones, and consumers are willing to buy _____ phones. A. zero, many B. zero, zero C. many, zero

C. many, zero

At a price of $65, consumers demand 650 pairs of shoes, and sellers supply 650 pairs of shoes. At $65, there is _____. A. excess demand (demand is greater than supply) B. excess supply (supply is greater than demand) C. no excess supply or demand

C. no excess supply or demand

You are trying to decide between two shirts: a red one and a green one. You decide to buy the green shirt, because you like the color. This means that you demanded the green shirt based on _____. A. population B. climate C. preference

C. preference

You are a jeans producer. When you sell your jeans, consumers pay the _____ that you charge. A. revenue B. profit C. price

C. price

A supply curve for the car industry would show the quantity of cars supplied at different _____. A. marginal costs B. demands C. prices

C. prices

The shoe industry has many sellers, many buyers, and similar products. Shoe companies function in a ________________ market.

competitive

Demand for surfboards in Southern California is most likely ___________ than the demand for surfboards in Alaska.

greater

Your marginal cost is $4.00 and the market price for your good is $2.00. At this market price, you are willing to supply _______ goods.

zero