Download Civics Unit 2 Study Guide

Unit 2 Study Guide
1. A binding price ceiling will make a shortage or a surplus?
2. A drought will cause the supply curve of vegetables to shift which way?
3. A legal maximum price at which a good can be sold is called what?
4. According to the Law of Demand, quantity demanded goes up as price moves
5. According to the Law of Supply, if price increases, supply does what?
6. Adam Smith wrote about what in Wealth of Nations?
7. Apple hires its 50th employee for its Mooresville branch. They will not hire another worker because it’s
not profitable. This is an example of what?
8. As more suppliers enter the market, what happens to supply?
9. Be able to identify the supply and demand graph and equilibrium point.
10. Competition has what effect on price?
11. Demand can only occur when a buyer is what?
12. Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are
to a change in price, the slope is either flat or steep?
13. If a good is a luxury, demand for the good would tend to be elastic or inelastic?
14. If a price ceiling is not binding, where is the equilibrium?
15. If a sin tax is placed on sales of alcohol, what will happen to supply?
16. If an item is a substitute it is defined as elastic or inelastic?
17. If quantity supplied is greater than quantity demanded there will be either a shortage and surplus?
18. If the price that people are willing to pay for mountain bikes increases, what will likely happen to the
supply of bikes?
19. If there was a shortage of gas, what would happen to price?
20. If two products are commonly used together, they are considered what?
21. In a market economy, the government plays what role?
22. Minimum wage is an example of either price floor or price ceiling?
23. Peanut Butter and Jelly are used together. What will happen to the demand for jelly if the price of peanut
butter decreases?
24. Putting capital into a business in hopes of profit would be found in what type of economy?
25. Relaxed government trade regulations allow producers to do what with production costs?
26. The local pizza restaurant makes such great bread sticks that consumers do not respond much to a change
in the price. If the owner is only interested in increasing revenue, he should do with bread sticks?
27. Tom paid $5 for the first ice cream cone, but decided he didn’t want another one unless it was cheaper.
This is an example of what key economic term?
28. What are characteristics of an elastic product?
29. What are the factors affecting the cost of a resource?
30. What are the factors of demand?
31. What determines price?
32. What economics concept explains how the recent rise in gas prices has not affected demand?
33. What is necessary for supply to exist?
34. What will happen in the rice market if buyers are expecting higher prices in the near future?
35. What will happen to price in a shortage?
36. Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, we
would expect the supply of flour to do what?