Civics Chapter 21 Practice Test
Which sales strategy demonstrates an understanding of the principle of diminishing marginal utility?
Consumers who purchase an item at full price may purchase another one at half price.
Which of the following best explains the upward slope of the supply curve?
High prices motivate suppliers to produce more
What is a characteristic of a market economy?
People have the freedom to choose from a variety of products.
What example illustrates how changes in substitutes can influence demand?
The demand for ford cars increases when the price of General Motors cars increases.
Which example illustrates how changes in complements can influence demand?
The demand for light-bulbs increases when the price of lamps decreses
The demand for goods and services in a particular area would probably increase if
a new apartment building in the area filled with families
Which factor is most likely to cause the supply of a product to decrease?
a repeal of subsidies for producers
Demand for a product tends to increase when
consumers expect a shortage
The market demand curve slopes downward because prices go
down as demand goes up
Demand is likely to be inelastic for goods that
have very few or no substitutes
the primary motive in business is to
increase profits
What are pairs of products that are complements?
light-bulbs and lamps
A demand curve shifts to the left when
people are willing to buy fewer items at all possible prices
A demand curve shifts to the right when
people are willing to buy more of the same item at any given price
Which factor has the MOST significant influence on the quantity supplied of any product?
price of the product
The vertical axis of a demand curve for a product displays
prices
The horizontal axis of a demand curve displays
quantities
What does a demand schedule show?
quantities and prices
In the United States, prices are established primarily through
the forces of supply and demand
A surplus typically indicates that
the price is too high
What is the main purpose of government price controls?
to correct unfairness in supply and demand
