- A tornado hits Kansas and wipes out Lauren’s tomato crop. What effect will this have on the Kansas tomato
market?
A. Market prices will fall, and quantity will rise.
B. Market prices will stay the same, and quantity will rise.
C. Market prices will stay the same, and quantity will decrease.
D. Market prices will fall, and the quantity will decrease.
E. Market prices will increase, and the quantity will decrease. - Mr. Sarquiz has developed a new machine that can recycle trash into fuel. Which of the following is most likely
to occur as a result of this invention?
A. The price of gasoline will double.
B. The price of cars will increase.
C. The quantity of gasoline will decrease.
D. The price of gasoline will decrease.
E. The demand for gasoline will increase. - If the price for tacos increases, which one of the following is likely to occur?
A. Fewer tacos will be made.
B. More people will eat tacos.
C. People will be less likely to substitute tacos for another product.
D. Producers can make more tacos.
E. None of the above. - A pharmaceutical company increases its prices for all of its medication and discovers that its total revenue
increases. Which one of the following best explains how this could happen?
A. The firm’s supply has increased.
B. The firm decreased production.
C. The firm has elastic demand.
D. The firm has inelastic demand.
E. The firm has elastic supply. - In an effort to increase consumption, the government has increased the minimum wage. What has the government
adjusted?
A. Subsidy
B. Grant
C. Price ceiling
D. Price floor
E. Firms’ demand - When the government establishes an effective price ceiling on rent, what will be the result?
A. A surplus of vacancies
B. A shortage of vacancies
C. No effect on vacancies
D. Higher prices
E. Less demand
Part I: The Fundamentals