AnswersOC27 Economics-2102310-Sem-MeadowsProfit

Profit — Unit test Answers

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1
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Which best describes the relationship between consumers and producers?

A
They usually ignore each other.
B
They interact with each other.
C
They agree on prices.
D
They dislike each other.
2
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[BLANK]

A
elasticity
B
quality
C
time
D
quantity
3

The graph shows a point of equilibrium.If quantity demanded exceeds quantity supplied, what most likely needs to happen to achieve equilibrium?

Question illustration
A
The supply needs to increase
B
The price needs to decrease
C
The price needs to increase
D
The demand needs to increase
4

The chart shows the marginal cost and marginal revenue of producing apple pies.What most likely will happen if the pie maker bakes a seventh pie?

Question illustration
A
The marginal cost will most likely decrease to $1.00
B
The marginal cost will most likely increase to $2.00
C
The marginal revenue will most likely decrease to $8.00.
D
The marginal revenue will most likely increase to $12.00.
5

What does elasticity measure in economics?

A
how the amount of a good changes when the producer hires more employees
B
how the amount of a good changes when the producer uses new materials
C
how the amount of a good changes when its price goes up or down
D
how the amount of a good changes when its distribution expands
6

The graph is a marginal cost curve that compares expenses for producing apple pies.According to the graph, the marginal cost begins to increase when the producer makes

Question illustration
A
two pies.
B
three pies.
C
four pies.
D
five pies.
7

[BLANK]

A
increases
B
decreases
C
stays the same
8

The graph shows a supply curve.Which events could cause the change in supply shown on this graph? Check all that apply.A producer goes out of business.A natural disaster causes production to drop.A new company joins the marketplace.A company begins to produce more goods.A resource needed to produce more of the good has became scarce.

Question illustration
A
A producer goes out of business.
B
A natural disaster causes production to drop.
C
A new company joins the marketplace.
D
A company begins to produce more goods.
E
A resource needed to produce more of the good has became scarce.
9

The chart shows the marginal cost and marginal revenue of producing apple pies. What most likely will happen if the pie maker continues to make additional pies?

Question illustration
A
The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.
B
The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.
C
The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.
D
The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.
10

Which is the best title for this diagram?

Question illustration
A
The Definition of Supply
B
Factors That Affect Supply
C
Elasticity and Competition
D
The Law of Supply
11

Motherboards, Inc., manufactures computer parts. The company’s total revenue is

A
the money the company earns after paying all of its production costs.
B
the total wages the company pays workers in its factories and stores.
C
the amount of money the company earns from selling an individual part.
D
the amount the company receives from the sale of all of its computer parts.
12

Producers hoping to earn profits supply goods and services to

A
debtors.
B
themselves.
C
competitors.
D
consumers.
13

Which statements correctly explain price floors and price ceilings? Choose four answers.

A
Ineffective price floors tend to be too high.
B
Ineffective price ceilings tend to be too low.
C
Price floors help producers by raising prices.
D
Price ceilings help consumers by lowering prices.
E
Effective price floors are set above equilibrium.
F
Effective price ceilings are set below equilibrium.
14

A chart that shows the connection between consumer demand and price is a

A
market schedule.
B
market curve.
C
demand curve.
D
demand schedule.
15

A possible result of disequilibrium is

A
excess demand.
B
lower demand.
C
fixed prices.
D
stable availability.
16

The highest amount a landlord can charge for rent is an example of

A
an incentive.
B
a price floor.
C
a price ceiling.
D
an elastic service.
17

A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take?

A
The store owner would most likely raise the price of the spring jeans to encourage producers.
B
The store owner would most likely lower the price of the spring jeans to encourage producers.
C
The store owner would most likely raise the price of the spring jeans to encourage consumers.
D
The store owner would most likely lower the price of the spring jeans to encourage consumers.
18

Which is likely to occur if there is a price increase for a good which exhibits elastic demand?

A
People might buy a more expensive substitute good.
B
People might buy a less expensive complementary good.
C
People might buy a less expensive substitute good.
D
People might buy a more expensive complementary good.
19

Both a demand curve and a demand schedule show how

A
prices affect consumer demand.
B
consumer demand affects income.
C
prices affect complementary goods.
D
consumer demand affects substitute goods.
20

Equilibrium occurs when supply and demand coordinate to

A
set excess demand.
B
set prices and production.
C
maintain excess supply.
D
raise prices and production.

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