Transcript Lesson #6 - Prices as Signals

Economics
Online study for
Lesson #6
“Prices as
Signals”
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Questions #1
Economists main use models to help?
Look smart
Decide what
to produce
Analyze
behavior and
predict
outcomes
Correct!!!!
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Questions #2
When the quantity supplied equals
quantity demanded, this spot on the
graph is called?
Equilibrium
Shortage
Surplus
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Questions #3
In the free market, if prices are too
high, the the invisible hand will?
Force price
downward
Shift to a
new curve
Force prices
upward
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Questions #4
Prices tend to favor?
Sellers
Entrepreneurs
No one
(they are
neutral)
Buyers
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Questions #5
Price is a monetary value of a product
established by?
Government
Supply &
Demand
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Questions #6
Prices are easy to understand
because?
The
government
says they are
We have had
them all our
lives
The invisible
hand directs
them
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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
Producers to
supply more and
people to buy less
Government to
intervene to
protect
consumers
Producers to
supply less and
consumers buy
less
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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 greater
than the quantity
demanded
the quantity
supplied is less
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
Supply & Demand
Federal minimum
wage laws
Market clearing
price
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Questions #12
The LoD tells us which?
When prices
are low,
consumers buy
more
When prices are
high, 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
No cost to
administer
War affects
prices
Prices are a
new concept in
economics
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Questions #14
In 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
administrative
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
Full production
capacity
Trial and error
Trade with
other nations
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Questions #18
If there is a surplus, the invisible hand
pushes price?
Upward
Downward
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Questions #19
If there is a shortage, the quantity
demanded is _______ than the quantity
supplied.
Greater than
Equal to
Less Than
Market clearing
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Questions #20
The set of ideal conditions and outcomes
for scarce resources is called?
Paradox of Value
Theory of
Equilibrium Pricing
Competitive
Price Theory
The Friedman
Campbell
Theory
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Test Questions
10 – True / False
10 – Multiple Choice
10 – Matching
5 to 10 – Milton Friedman dvd
5 bonus questions
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