U.S. Gov. and Economics Pt. 2 (Exam 4) – Flashcards
Unlock all answers in this set
Unlock answersquestion
What is the effect of import restrictions on supply?
answer
(It Is NOT "They cause the available supply of goods to rise")
question
Which is a fixed cost?
answer
rent
question
Which of these products or services is likely to have an inelastic supply in the short run?
answer
cargo ships
question
Which of the following is the best example of a good that has inelastic demand?
answer
salt
question
Which factor probably caused the change shown in the graphs? (Title Graph "Market Supply Curve")
answer
An increase in the cost inputs
question
Owners of digital cameras have to buy memory cards in order to use the cameras. Cameras and memory cards are
answer
complements
question
The price of cranberry juice suddenly increases. As a result, Glenda begins drinking more grape juice, which is less expensive, but tastes just as good to her. In this case, Glenda's elastic demand is due to
answer
availability of substitutes.
question
Gerda owns a grocery store. When decreasing prices force her to cut costs, one of the first things she does is
answer
decrease hours for some workers.
question
Which of the following is an example of government influence on supply?
answer
subsidies
question
How does a person's perception of a good as a necessity or a luxury affect his or her purchase of it?
answer
A good that is perceived as a necessity will be purchased even if the price rises.
question
Which of the following actions by the government constitutes a subsidy?
answer
a payment to farmers for not cultivating land
question
How does an increase in an excise tax on cars affect the supply of cars?
answer
Fewer cars will be made.
question
A steel mill has fixed costs of $100 per hour and variable costs of $50 per hour. What will happen to these costs if the mill closes?
answer
The variable costs will drop, but the fixed costs will stay the same.
question
How many fewer shirts are sold at the new demand level for any given price?
answer
200
question
Businesses often use information such as age, income level, and occupation to sell products to certain groups of people. What is this type of information called?
answer
demographics
question
A music store holds a half-price sale on all CDs. During the sale, people buy more CDs than usual. What does this event show?
answer
the law of demand
question
Due to an increase in her rent, Isa needs to cut back her spending on other items. Which of the following types of goods will Isa consume less of?
answer
normal goods
question
If a seller expects the price of a good to rise in the future, the seller will
answer
store these goods until the price goes up.
question
A large increase in gas prices creates a demand for cars with good gas mileage. It takes months for car companies to make these cars. How do you describe this market for cars?
answer
(It Is NOT "inferior")
question
If prices rise but income stays the same, what is the effect on the quantity demanded?
answer
Fewer goods are bought.
