Economics Unit 2

Which of the following would NOT be a “shifter” or “determinant” of DEMAND?

• Complementary goods

• Income level

• Number of producers

What will happen in the rice market RIGHT NOW if buyers (consumers) are expecting higher prices in the future?

• The demand for rice will increase

• The demand for rice will decrease

• The supply of rice will increase

If we follow the law of demand, then a higher price for ski tickets would be expected to:

• Increase the number of skiers

• Decrease the demand for ski tickets

• Decrease the desire to go outside

Suppose that there is an increase in resource prices used to produce product X. We would expect:

• Supply to increase

• Supply to decrease

• Demand to decrease

If, at the current price, there is a shortage of a good, then:

• The price is below the equilibrium price

• The market can be in equilibrium

• The price is above the equilibrium price

Which of the following is an example of a “shifter” or “determinant” of demand?

• Addition of a complement good

• The expected price of the good next month

• All of the above

Wheat is the main ingredient in the production of flour. If the price of wheat increases, all else equal, we would expect:

• The supply of flour to decrease

• The supply of flour to increase

• The demand for flour to decrease

Demand is driven by ________________, while supply is driven by _______________.

• Demand is driven by consumer preferences, while supply is driven by production costs.

• Demand is driven by consumer income, while supply is driven by production capacity.

• Demand is driven by market trends, while supply is driven by raw material costs.

• Demand is driven by government policies, while supply is driven by consumer demand.

1. A tariff is a tax on goods that are _____________ (bought from) other countries, which makes the prices ________for those goods. 

   1. exported, higher

• exported, higher

• imported, higher

• imported, lower

An example of a current tariff being enforced by the US government right now is the 25% tariff on __________ and ___________, which may impact prices of new cars.

• plastic, steel

• steel, rubber

• aluminum, steel