Pre-AP Macroeconomics Quiz 1

Name_______________________
Date ________________________
1. Define the law of demand
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2. Define the law of supply
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Matching Match the vocabulary words with the correct definition
3. _____ Consumer
4. _____Goods
5. _____Services
6. _____Wants
7. _____Needs
8. _____Opportunity cost
9. _____Specialization
10. _____Competition

a.
b.
c.
d.
e.
f.
g.
h.

When people do jobs that they are interested in and do best

Someone who uses goods or services
Things that people must have in order to survive
A contest between businesses or people to get the most customers
or best price
Materials that are produced for people to buy or things that can
be seen or touched (tangible)
The thing you give up when making a choice between two things
Things that people would like to have but can live without
Jobs that people do for other people in return for pay (intangible)

11. What is the basic economic problem? Explain.

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12. ____The supply curve is upward-sloping because:
a. As price increases, so do costs
b. As the price increases, consumers demand less
c. As the price increases, suppliers can earn higher levels of profit or justify higher
marginal costs to produce more
d. None of the above
e. All of the above

13. ____Which of the following provides an example of complementary goods?

a. Blue and black pens
b. Toothbrush and toothpaste
c. Apples and oranges
d. Hamburgers and hotdogs
14. ____When the supply curve shifts inwards, what is the effect on equilibrium price and
quantity?
a. Price increases, quantity decreases
b. Price decreases, quantity increases
c. Price increases, quantity increases
d. Price decreases, quantity decreases
15. ____If a new environmental tax is places on gasoline, what happens to the supply curve
for cars?
a. The demand curve shifts to the left
b. The demand curve shifts to the right
c. The supply curve shifts to the left
d. The supply curve shifts to the right
16. ____Which of the following is not a determinant for demand (shifters of the demand
curve)?
a. Substitute goods
b. Complementary goods
c. Income
d. Technology
e. None of the above
f. All of the above are determinants of demand
17. ____Which of the following are possible examples of substitute goods?
a. Shampoo and conditioner
b. Hamburgers and hotdogs
c. Toothbrush and toothpaste
d. Right and left shoes
18. ____If Rose gets an increase in income and buys more of good X, then we can know that
good X:
a. Is an inferior good
b. Is a normal good
c. Is a Giffen good
d. Is a substitute good with good Y
19. ____Which of the following is not one of the 8 economic goals
a. High levels of inflation to ensure producers make a lot of money
b. Full employment
c. Balance of trade with the rest of the world

d. Economic freedom
e. All of the above are part of the 8 economic goals
f. None of the above
20. Based on the table given, graph the supply and demand curves to find the market
equilibrium price of fridge magnets sold at a souvenir store. Remember to label your
graph!
Price

Quantity supplied

Quantity demanded

$3.00

235

196

$2.89

226

203

$2.74

215

210

$2.60

198

219

$2.55

180

228