Answers26-27 Ignite Economics-KY-EconomicsCase Study: Starting a Business

Case Study: Starting a Business — Unit test Answers

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1
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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.
2
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A possible result of disequilibrium is

A
excess demand.
B
lower demand.
C
fixed prices.
D
stable availability.
3

[BLANK]

A
elasticity
B
quality
C
time
D
quantity
4

A monopoly is a market that has

A
few competing businesses.
B
many sellers of the same item.
C
many sellers of a variety of products.
D
a single supplier of a good or service.
5

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.
6

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
7

In which way do producers try to differentiate themselves in monopolistic competition?

A
price
B
advertising
C
product features
D
image
8

Which best describes how specialized producers decrease their opportunity costs?

A
by reducing production costs
B
by focusing on target markets
C
by increasing production of certain items
D
by limiting the types of goods produced
9

Why are utilities, such as electricity and water, examples of natural monopolies?

A
The cost of production restricts competition in the market.
B
There are limited natural resources to meet demand.
C
Consumers only trust known companies to provide these essentials.
D
There is no need for alternative options.
10

Look at the chart comparing the price of graphic T-shirts to the quantity supplied.

Question illustration
A
demand curve.
B
demand schedule.
C
supply curve.
D
supply schedule.
11

Which quality best describes a producer with an absolute advantage?

A
efficient
B
fast
C
accurate
D
prolific
12

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.

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