ECON - Unit 3 Practice Test

Front

What is the basic principle of the law of demand?

Back

When a good’s price is lower, people will buy more of it.

Front

The tendency of consumers to replace a relatively more expensive product with a similar, lower-priced product is called the:

Back

Substitution effect

Front

What condition has been reached when quantity supplied equals quantity demanded?

Back

Equilibrium/market clearing

Front

The newest Marvel Avengers movie receives a very bad review. The movie’s popularity declines and the demand for tickets decreases. This causes the demand curve to shift.

Back

To the left, due to tastes and preferences

Front

If consumers’ incomes rise, the demand curve will shift

Back

To the right, due to a change in income

Front

When the price of all the popular brands of salsa went up, the demand curve for tortilla chips moved

Back

To the left, due to price of related goods

Front

If the competition in the mechanical pencil market increases because a new firm enters the market, the supply curve for mechanical pencils will shift

Back

To the right, due to number of suppliers

Front

If a new tax is put on the producers of cell phones, the supply curve for cell phones will shift

Back

To the left, due to government actions

Front

If the price of chicken feed decreases, the supply of chicken nuggets will shift

Back

To the right, due to cost of production

Front

How will a new robot that makes the production of watches more efficient and less expensive affect the supply of watches?

Back

To the right, due to changes in tech