AnswersKY-EconomicsUnit Test

Unit Test — Unit test Answers

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This table shows the cost of producing ice cream for several manufacturers.Manufacturer Amount Produced CostThe Dairy 100 gallons $10 Ice Cream, Inc. 100 gallons $15 Frozen Treats 150 gallons $12 Bob & Gary’s 125 gallons $15 Which manufacturer has the absolute advantage?

A
The Dairy
B
Ice Cream, Inc.
C
Frozen Treats
D
Bob & Gary’s
23
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When discussing comparative and absolute advantage, which best describes specialization?

A
developing expertise in certain types of production
B
limiting the types of goods and services produced
C
targeting specific consumers and retailers
D
producing certain items for specific market segments
24

The Davis family grows organic vegetables to sell at a local farmer’s market. Which are factors that directly affect their profit? Check all that apply.

A
an increase in the cost of farm equipment
B
a rise in demand for organic produce
C
an increase in customers at the market
D
a change in the market price for non-organic fruit
E
a sale on organic meats at the market
25

Who sets the price in a monopolistic competition?

A
producers and consumers
B
consumers only
C
government
D
producers only
26

Which is the best measurement to use to determine who might have the absolute advantage?

A
high opportunity cost
B
low opportunity cost
C
low efficiency
D
high efficiency
27

The graph shows excess supply.Which explains why the price indicated by p2 on the graph is higher than the equilibrium price?

Question illustration
A
As prices rise, quantity demanded goes up.
B
As prices rise, quantity demanded goes down.
C
As prices rise, quantity demanded stays the same.
D
As prices rise, quantity demanded disappears.
28

The graph shows a point of equilibrium.What does "P" represent on the graph?

Question illustration
A
the point where equilibrium is achieved
B
the price at the equilibrium point
C
the average price of goods sold
D
the point where supply and demand drop
29

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

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