UNIT 2 Test Microeconomics

Profit equals the total amount of money made minus

• expenses.
• prices.
• revenue.
• supply.

The total amount of a product available in a market at a given price is called the

• count.
• demand.
• number.
• supply.

Which statement best explains the law of supply?

• The quantity supplied by producers increases as prices rise and decreases as prices fall.
• The quantity supplied by producers decreases as prices rise and increases as prices fall.
• The quantity supplied by consumers increases as prices rise and decreases as prices fall.
• The quantity supplied by consumers decreases as prices rise and increases as prices fall.

According to the law of demand, price and quantity move

• along a track in the same direction.
• along a track in opposite directions.
• from different points toward one another.
• from the same point away from one another.

Based on the graph, which event could cause the change shown?

• A product becomes less popular and fewer customers purchase it.
• A product becomes more popular and more customers purchase it.
• A product sells out of stores and customers can no longer purchase it.
• A product is restocked on store shelves and is ready for customer purchase.

Supply and demand coordinate to determine prices by working

• together.
• competitively.
• with other factors.
• separately.

In order to achieve equilibrium, what else must be included on the graph?

• disequilibrium
• supply curve
• excess supply
• excess demand

What does "Q” represent on the graph?

• the point where equilibrium is achieved
• the quantity at the equilibrium point
• the average cost of goods sold
• the point where supply and demand drop

Which explains the connection between the law of demand and excess demand?

• The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.
• The law states that increases in price increases leads to greater quantity demanded and limited supply, which occurs during excess demand.
• The law states that decreases in price leads to greater supply and equilibrium, which occurs during excess demand.
• The law states that increases in price leads to greater supply and equilibrium, which occurs during excess demand.

What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

• excess supply
• stable prices
• exact equilibrium
• increased production