AnswersCHS EconomicsUnit Test

Unit Test — Unit test Answers

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1
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The point where supply and demand meet and prices are set is called

A
coordination.
B
correspondence.
C
equality.
D
equilibrium.
2
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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.
3

On this graph, what does the green arrow represent?

Question illustration
A
an ineffective price floor set above equilibrium causing a surplus.
B
an effective price floor set below equilibrium causing a shortage.
C
an ineffective price ceiling set above equilibrium causing a surplus.
D
an effective price ceiling set below equilibrium causing a shortage.
4

In the market, actions known as incentives affect

A
producers only.
B
consumers only.
C
consumers or producers.
D
neither consumers nor producers.
5

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
6

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.
7

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.
8

What is the best definition of marginal benefit?

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
9

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
10

To generate higher profits, producers must work to

A
increase their total supply.
B
increase their total expenses.
C
decrease their customer base.
D
decrease their production costs.
11

The graph shows demand.In order to achieve equilibrium, what else must be included on the graph?

Question illustration
A
disequilibrium
B
supply curve
C
excess supply
D
excess demand
12

The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price. What will most likely result from this price control?

A
The quantity demanded for bread will decrease, and the quantity supplied will increase.
B
The quantity demanded and quantity supplied for bread will increase.
C
The quantity demanded for bread will increase,and the quantity supplied will decrease.
D
The quantity demanded and quantity supplied for bread will decrease.
13

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
14

In economics, if a good is inelastic,

A
consumers have lost an interest in purchasing it.
B
producers have lost an interest in manufacturing it.
C
its supply or demand is too sensitive to price changes.
D
its supply or demand is not sensitive to price changes.
15

Both excess supply and excess demand are a result of

A
equilibrium.
B
disequilibrium.
C
overproduction.
D
elasticity.
16

According to the law of demand, price and quantity move

A
along a track in the same direction.
B
along a track in opposite directions.
C
from different points toward one another.
D
from the same point away from one another.
17

Which is an example of a positive incentive for consumers?

A
a sales tax imposed by a state
B
a steady rise in profits over a year
C
a coupon clipped from a newspaper
D
an increase in price for a popular product
18

The chart shows the marginal revenue of producing apple pies.According to the chart, the marginal revenue

Question illustration
A
decreases by ten dollars as production increases.
B
increases by ten dollars as production increases.
C
falls to zero dollars as production increases.
D
remains the same as production increases.
19

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

A
$300
B
$350
C
$400
D
$450
20

What is the difference between profit and revenue?

A
Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.
B
Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good.
C
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs.
D
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.

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