Unit 2 Economics

Americans revive their love of SUV’s and the newly remodeled, but still “gas guzzling” Hummer. What happens to the market for gasoline?

• Demand for gasoline will decrease 

• Demand for gasoline will increase

• Demand for gasoline will stay the same

If the price of Frozen Yogurt increased then the demand for ice cream will 

• increase

• decrease

When the price of good A rises, people start to drink good B. In this case, what is good B considered?

• luxury good

• complementary good

• substitute good

• normal good

When CDs and MP3 players came along, demand for cassette players decreased. What would happen next to cassette tapes?

• Demand would fall

• Demand would increase

• Supply would fall

• Supply would increase

For the law of supply, as price rises, what happens to quantity supplied?

• it goes up

• it goes down

• it stays the same

• it is not effected

What does this curve represent?

• demand

• supply

• equilibrium

• shortage

What does this curve represent?

• supply

• equilibrium

• demand

• surplus

What factor is most likely to cause an increase in demand for a new type of automobile?

• A commercial in which the car is endorsed by a popular celebrity.

• A comedian making fun of the car on late night TV.

• A rumor that the car's gas tank is prone to explosion.

• The price of the car going up.

Sending goods to another country to sell.

• import

• export

The development of a worldwide economy where resources flow fairly freely across borders.

• Globalization

• Economy

• GDP