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Econ 202 Questions with Correct Answer1
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Econ 202 Questions with Correct Answer1
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Econ 202 Questions with Correct AnswersA ban on an import will ____ the price domestic consumers pay for the
good, and ___ the amount the good consumed Correct Answer-increase ;
decrease
a decrease in supply and an increase in demand are represented by a
movement from Correct Answer-point c to point a
A binding minimum wage low can be expected to Correct Answer-cause
unemployment for some unskilled workers
A good for which demand decreases when income increases is known as
an ______ good Correct Answer-inferior
a tariff on a product Correct Answer-makes domestic sellers better off
and domestic buyers worse off
a demand curve is defined as the relationship between Correct Answer-
the price of a good and the quantity of that good that consumers are
willing to buy
A price taker is a buyer or a seller who: Correct Answer-takes the
market price as given
, A natural monopoly is defined as Correct Answer-an industry in which
economies of scale allow one firm to supply the entire market at the
lowest possible cost
A key characteristic of a competitive market is that Correct Answer-
Producers sell nearly identical products
A competitive firms short-run supply curve is part of which of the
following curves? Correct Answer-marginal cost
A competitive market is in long-run equilibrium. If demand increases we
can be certain that price will Correct Answer-rise in the short run. Some
firms will enter the industry. Price will then fall to reach a new long run
equilibrium
a firm experiences diminishing marginal returns because: Correct
Answer-at least one factor of production is fixed and becomes
constraining to production.
A firm that shuts down temporarily has to pay Correct Answer-its fixed
costs but not its variable costs
A market demand curve shows Correct Answer-how much of a good all
buyers are willing and able to buy at each possible price
a response to a price change would be described as Correct Answer-A
movement along an existing demand curve
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