Macroeconomics Pre-Test

What happens when supply exceeds demand in a market?

• Shortage

• Surplus

• Equilibrium

• Elasticity

Which term describes the value added when a product is available where it’s needed?

• Possession Utility

• Time Utility

• Place Utility

• Information Utility

Which of these market structures has the most competition?

• Monopoly

• Perfect Competition

• Oligopoly

• Monopolistic Competition

When prices rise significantly due to a shortage, this is an example of:

• Price elasticity

• Supply and demand interaction

• Surplus management

• Consumer decision-making

Which of the following best describes entrepreneurship?

• The process of making products more valuable

• Managing market competition

• Starting and running a business with innovation and risk

• Allocating resources to maximize income

If a company raises prices and customers continue to buy the product, the demand is:

• Elastic

• Inelastic

• Surplus

• Equilibrium

What is the purpose of a cost-benefit analysis?

• To calculate total profits

• To compare costs and benefits of a decision

• To determine market structures

• To assess income distribution

A farmer sells tomatoes in a highly competitive market with many other sellers. What happens if all sellers lower their prices?

• Demand for tomatoes will increase.

• The market will move toward equilibrium.

• A surplus of tomatoes will occur.

• The farmer will lose all income.

How do monopolies typically impact prices and production?

• Lower prices and increase production

• Set higher prices and limit production

• Increase competition and lower profits

• Balance supply and demand perfectly

What happens at market equilibrium?

• Prices fall below production costs

• Supply and demand are balanced

• There is a surplus of goods

• Consumers stop buying products