EconomicsOnline study for Lesson #6

“Prices as Signals”

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question

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Questions #1

Economists main use models to help?

Look smart

Analyze behavior

and predict outcomes

Decide what to produce

Correct!!!!Good Job

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Questions #2

When the quantity supplied equals quantity demanded, this spot on the graph is called?

Equilibrium

Surplus

Shortage

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Questions #3

In the free market, if prices are too high, the the invisible hand will?

Force price

downward

Force prices

upward

Shift to a new curve

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Questions #4

Prices tend to favor?

Entrepreneurs

Sellers

No one (they are neutral)

Buyers

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Questions #5

Price is a monetary value of a product established by?

GovernmentSupply & Demand

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Questions #6

Prices are easy to understand because?

The government

says they are

The invisible

hand directs them

We have had them all our

lives

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Questions #7

To achieve social goals, prices are set by?

The government

The free market

The invisible hand

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Questions #8

The best example price ceilings is?

Minimum wage

Rent controlled

apartments

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Questions #9

Understanding the LoD & LoS, if prices are high, it signals?

Producers to supply less and people to buy

more

Government to intervene to protect consumers

Producers to supply more and

people to buy less

Producers to supply less

and consumers

buy less

Correct!!!!Good Job

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Questions #10

At a given price, a surplus occurs when?

the quantity demanded is the same as the quantity

supplied

the quantity supplied is less

than the quantity

demanded

the quantity supplied is

greater than the quantity

demanded

the quantity demanded is

more than the quantity supplied

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Questions #11

An example of an economic society goal is which?

Free markets

Federal minimum wage

laws

Supply & Demand

Market clearing price

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Questions #12

The LoD tells us which?

When prices are high,

consumers buy more

When prices are low,

consumers buy more

When prices are low,

consumers buy less

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Questions #13

Which of the following IS NOT an advantage of prices

Prices are neutral

War affects prices

No cost to administer

Prices are a new concept in economics

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Questions #14In a free economy, the market, not government intervention, find its own prices without help

TRUE FALSE

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Questions #15

Which IS NOT a problem associated with rationing?

Competitive Markets

Fairness

Reduce people’s incentive to

work

High administrativ

e costs

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Questions #16

A rebate is a refund of the full original purchase price.

TRUE FALSE

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Questions #17

Market equilibrium price is found through?

Government Intervention

Trial and error

Full production capacity Trade with

other nations

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Questions #18

If there is a surplus, the invisible hand pushes price?

DownwardUpward

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Questions #19If there is a shortage, the quantity demanded is _______ than the quantity supplied.

Greater than Less Than

Equal to Market clearing

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Questions #20The set of ideal conditions and outcomes for scarce resources is called?

Paradox of Value

Competitive Price Theory

Theory of Equilibrium

Pricing

The Friedman Campbell Theory

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Good work on the review!If you are comfortable with

these questions, you will do fine on the test

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Test Questions

10 – True / False10 – Multiple Choice10 – Matching5 to 10 – Milton Friedman dvd5 bonus questions

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