Micro Economics SSEMI

SSEMI 3 a: Related goods, income, and preferences are variables MOST LIKELY to affect which part of a market?

• supply

• demand

• quantity supplied

• quantity demand

SSEMI 2 a: If the price of a product increases, which is true regarding the demand curve?

• demand increases

• demand decreases

• quantity demanded increases

• quantity demanded decreases

SSEMI 1 a: Which statement is true about the circular flow diagram?

• Households are demanders in the product market and suppliers in the factor market

• Business are demanders in the product market and suppliers in the factor market.

• Households are demanders in the factor market and suppliers in the product market.

• Businesses and households are not components of the circular flow diagram.

SSEMI 2 b: How are equilibrium price and quantity determined in most markets in the U.S. Economy?

• government sets the price

• consumer and producer interaction

• by a point on a production possibilities curve

• by the law of demand

SSEMI 4 a: Sherry has a business partnership with her sister. They are trying to decide whether to incorporate or not. If they decide to incorporate, what’s one major disadvantage they will face?

• the likelihood of conflict

• they will increase their liability

• there is a greater possibility for loss of control of the company

• it will be more difficult to raise capital for the business

SSEMI 1 b: The primary of role of money in the economy is to

• help set interest rates at financial institutions.

• provide a mechanism to assist foreign trade.

• serve as a medium of exchange for goods and services.

• identify prices in various markets.

SSEMI 2 a: Which statement describes the law of demand?

• As prices rise, quantity demanded decreases.

• As prices rise, demand decreases.

• As prices fall, quantity demanded decreases.

• As prices fall, demand decreases.

SSEMI2 a: Which explains why a supply line is upward sloping?

• the Law of Supply states there is a direct relationship between price and quantity

• the Law of Demand states there is an indirect relationship between price and quantity

• the Law of Supply compares marginal costs and marginal benefits in a constant rate

• the Law of Demand shows a positive relationship between two goods, creating the slope

SSEMI 2 c: What occurs to equilibrium price and quantity in a market if demand increases, but supply remains the same?

• Price increases, quantity decreases

• price decreases, quantity increases

• price is unknown, quantity increases

• price increases, quantity increases

SSEMI2 b: When buyers and sellers interact in a market, what is the result?

• Over time, fewer and fewer goods are produced because buyers have all they want.

• Usually a market clearing price is determined.

• Equilibrium quantities are determined and then prices are set by the government.

• Since buyers and sellers are always changing their preferences, markets become unstable and unreliable.