AnswersOC27 Economics-2102310-Sem-MeadowsUnit Test

Unit 2 Test Answers

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What is the difference between a price floor and a price ceiling?

A
A price floor is the minimum price allowed for a good. A price ceiling is the maximum price allowed for a good.
B
A price floor is the maximum price allowed for a good. A price ceiling is the minimum price allowed for a good.
C
A price ceiling below the equilibrium price has no effect.
D
A price floor above the equilibrium price has no effect.
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Profit equals the total amount of money made minus

A
expenses.
B
prices.
C
revenue.
D
supply.
63

This table shows the number of cookies several bakeries sell each day.Bakery Number of Cookies Sold Mrs. Track’s 90 Chips 100 The Bakeshop 75 Uncle John’s 125 All else being equal, which bakery has the absolute advantage?

A
Mrs. Track’s
B
Chips
C
The Bakeshop
D
Uncle John’s
64

What is the best definition of marginal cost?

A
the possible income from producing an additional item
B
the price of producing one additional unit of a good
C
the additional income gained from selling an additional good
D
the financial gain from business activity minus expenses
65

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

A
count.
B
demand.
C
number.
D
supply.
66

Clark’s Cleaners is a housekeeping service. The company’s expenses include the

A
money the company earns after paying all of its production costs.
B
cleaning supplies and any equipment the company purchases.
C
total amount of money the company receives from its customers.
D
amount of money the company earns from an individual cleaning.
67

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

A
count.
B
demand.
C
number.
D
supply.
68

[BLANK]

A
total revenue
B
marginal revenue
C
marginal cost
D
total units produced
69

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

A
excess supply
B
stable prices
C
exact equilibrium
D
increased production
70

Natural monopolies occur when one producer

A
can meet the market’s entire demand.
B
controls the method of production.
C
is the only one authorized to produce a given product.
D
creates unique products.
71

This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes 1 Sparkling 100 per hour 200 per hour 2 Bright White 100 per hour 250 per hour 3 Fresh! 200 per hour 250 per hour 4 Mmmint 150 per hour 150 per hour Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

A
2, 1, 3, 4
B
1, 2, 3, 4
C
4, 3, 1, 2
D
2, 1, 4, 3
72

A car dealer who does not have enough customers for a supply of new cars faces

A
equilibrium.
B
disequilibrium.
C
coordination.
D
excess demand.
73

True or False? Higher opportunity costs equal a greater comparative advantage.

A
True
B
False
74

Which helps enable an oligopoly to form within a market?

A
Costs of starting a competing business are too high.
B
The government restricts market entry.
C
The number of options in a market confuses consumers.
D
No competition exists between producers.
75

The graph shows excess demand.Which needs to happen in order to stop disequilibrium from occurring?

Question illustration
A
Q needs to be coordinated with supply.
B
Q needs to be coordinated with demand.
C
The price of goods needs to be increased.
D
The price of goods needs to be decreased.
76

Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?

A
natural monopoly
B
de facto monopoly
C
government monopoly
D
technological monopoly
77

On a graph, an equilibrium point is where

A
a supply curve and a demand curve meet.
B
a supply curve is higher than a demand curve.
C
the supply and demand curves head up.
D
the supply and demand curves head down.
78

If consumer sovereignty is considered greatest in a system of pure competition, why is sovereignty still limited?

A
Consumers still rely on producers’ set prices.
B
Few products are actually sold on the basis of pure competition.
C
Choices are driven by price when goods are identical.
D
Limited price variations restrict actual choice.
79

In the United States, which type of industry is often considered part of an oligopoly?

A
electric companies
B
cell phone carriers
C
mail delivery services
D
denim companies
80

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