Econ Unit 2 Review

When the price of something increases, the quantity demanded ____

• ​increases

• remains unchanged

• decreases

• reverses

A change in quantity demanded is represented by _____

• Substitution.

• A shift of the demand curve.

• ​Movement along the demand curve.

  ​

  ​

  ​

• Complements.

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?

• ​a complement
• ​unit elasticity
• ​the substitution effect
• ​diminishing marginal utility

2B On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___

• ​an increase in demand.
• ​a change in price.
• ​a decrease in demand.
• ​a change in demand.

2B Which would an economist consider a likely complement for coffee?

• ​tea
• ​donuts
• ​chicken
• ​water

2C Why is a demand curve downward sloping?

• ​because quantity demanded increases as price decreases
• ​because of the natural elasticity of the market
• ​because it shows how increasing incentives changes demand
• ​because it reflects the desire, ability, and willingness of consumers

​2C Which of these is the best description of a normal supply curve?

• ​Its slope goes down when the diagram is read from left to right
• ​Its slope is completely horizontal.
• ​Its slope goes up when the diagram is read from left to right.
• ​Its slope is mostly horizontal, with occasional vertical fluctuations.

8A ​Under perfect competition, what sets the equilibrium price in the market?

• nonprice competition
• supply and demand
• ​the government
• ​a monopoly

8A Which market structure is defined by a single producer?

• monopoly
• monopolistic competition
• oligopoly
• pure competition

​8B A person who wishes to incorporate a business needs to:

• ​pay the government dividends.
• find stockholders.
• do all of the above.
• file for permission with the government.