Download U-2 answers

UNIT TWO SAMPLE QUESTIONS
Answer Section
MULTIPLE CHOICE
1. ANS: B
According to the law of supply, producers offer more of a good as its price increases and less as its price falls.
TOP: Free Market Economy | Law of Supply
2. ANS: A
The equilibrium point occurs at 40 hats per game, where the quantity supplied equals the quantity demanded
at $7.00 per hat.
TOP: Free Market Economy | Equilibrium
3. ANS: B
Barriers to entry is the term economists use to refer to factors, such as start-up costs and technology, that new
firms must overcome to enter the market.
TOP: Free Market Economy | Barriers to Entry
4. ANS: D
At equilibrium, buyers do not confront shortages and sellers find enough buyers: both benefit.
TOP: Free Market Economy | Choice and Efficiency
5. ANS: D
A shift of the demand curve is caused by something other than price changes. A shift to the right is caused by
an increase in demand, and colder weather would increase demand for winter coats.
TOP: Demand | Shift in Demand Curve
6. ANS: B
The equilibrium price is the price at which quantity demanded equals quantity supplied.
TOP: Markets | Equilibrium
7. ANS: A
The law of supply states that producers will offer more of a good as its price increases.
TOP: Price System | Role of Prices
8. ANS: D
Equilibrium is the point at which quantity supplied and quantity demanded are equal.
TOP: Prices | Equilibrium
9. ANS: A
A monopoly is a market in which a single seller has control.
TOP: Market Structures | Monopoly
10. ANS: C
Deregulation means that the government no longer controls an industry.
TOP: Regulation | Deregulation