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1. For a given change in supply, the more elastic is demand the greater will be A. the change in equilibrium quantity relative to the change in equilibrium price B. the change in equilibrium price relative to the change in equilibrium quantity C. equilibrium price and quantity will change by the same amount D. cannot tell from information given

2. Which of the following is an example of normative economics? A. using the production possibilites model to analyze the problem of scarcity B. determining the change in equilibrium price resulting from a change in demand C. determining the goals for economic policy D. none of the above are examples of normative economics

3. If the demand for a product is price inelastic, then a decrease in price would lead to a increase in quantity demanded but a decrease in total expenditure. True or False

4. If a 10 percent change in price leads to a 20 percent change in quantity demnded, then the price elasticity of demand wuld be equal to two. True or False

5. In terms of the production possibilities frontier, a point lying inside the frontier represents existence of inefficiency in resource use, i.e. producing less than is possible with the resources available. True or False

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Keith Leannon
Keith LeannonLv2
30 Sep 2018
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Related questions

The primary difference between a change in supply and a change in the quantity supplied is:
Choose one answer.
a. a change in quantity supplied is a shift in the supply curve, and a change in supply is a movement along the supply curve.
b. both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions.
c. a change in quantity supplied is a movement along the supply curve, and a change in supply is a shift of the supply curve.
d. a change in supply is a movement to the left along the supply curve and a change in quantity supplied is a movement to the right along the supply curve.

Question 2
What is the difference between a shortage and scarcity?
Choose one answer.
a. Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level.
b. Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages.
c. A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case.
d. There is no distinction between the two. They are the same thing.

Question 3
A decrease in supply means:
Choose one answer.
a. a shift to the left of the entire supply curve.
b. moving downward (to the left) along the supply curve with lower prices.
c. less will be demanded at every price.
d. more will be supplied at every price.

Question 4
A decrease in demand, with no change in supply, will lead to ________ in equilibrium quantity and ________ in equilibrium price.
Choose one answer.
a. an increase; an increase
b. an increase; a decrease
c. a decrease; an increase
d. a decrease; a decrease

Question 5
After graduation from college you will receive a substantial increase in your income from a new job. If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a( n ):
Choose one answer.
a. normal good.
b. substitute good.
c. complementary good.
d. inferior good.

Question 6
There is equilibrium in the market when:
Choose one answer.
a. there is no shortage.
b. there is no surplus.
c. price is established where the supply curve and the demand curve intersect.
d. all of the above are true.

Question 7
Which would not cause the supply curve to shift?
Choose one answer.
a. a change in technology
b. a change in factor costs
c. a change in the price of the good
d. a change in the prices of related goods

Question 8
Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:
Choose one answer.
a. an increase in the demand for potatoes.
b. an increase in the quantity of potatoes demanded.
c. a decrease in the demand for potatoes.
d. no change in the demand for potatoes.

Question 9
Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for milk?
Choose one answer.
a. The equilibrium price and quantity rise.
b. The equilibrium price rises and the equilibrium quantity falls.
c. The equilibrium price and quantity fall.
d. The equilibrium price falls and the equilibrium quantity rises.

Question 10



A temporary price of $2 in this market would result in:
Choose one answer.
a. a surplus of 8,000 bushels.
b. a shortage of 8,000 bushels.
c. a shortage of 10,000 bushels.
d. a surplus of 10,000 bushels.

Question 11
The price of oranges rises. What happens in the market for apples, which are a substitute for oranges?
Choose one answer.
a. The equilibrium price falls, and the equilibrium quantity rises.
b. The equilibrium price rises, and the equilibrium quantity falls.
c. The equilibrium price and quantity rise.
d. The equilibrium price and quantity fall.

Question 12
A market surplus occurs if the:
Choose one answer.
a. price is below the equilibrium price.
b. price is equal to the equilibrium price.
c. equilibrium price is above the actual price.
d. equilibrium price is below the actual price.

1. When the percentage change in the quantity demanded is less than the percentage change in price, then demand is
A. elastic.
B. irrelevant.
C. inelastic.
D. undefined.
E. unit elastic.

2. Assume the cost of certain inputs used to produce artificial Christmas trees increases and, at the same time, the economy moves into a recession, causing the incomes of consumers to decrease. Which of the following will happen to the equilibrium price and quantity of artificial Christmas trees? (Assume artificial Christmas trees are normal goods.)
A. Quantity will decrease; price cannot be determined.
B. Price will decrease; quantity cannot be determined.
C. Quantity will increase; price cannot be determined.
D. Price will increase; quantity cannot be determined.

If the price elasticity of demand for a product is -2, this implies that:
Ā 
A. if the price increases by 2 percent, the quantity demanded will decrease by 1 percent.

B. if the price increases by $1, the quantity demanded will decrease by 2 units.

C. the change in quantity demanded divided by the change in price is equal to 2.

D. if the price increases by 1 percent, the quantity demanded will decrease by 2 percent.

E. if the price increases 1 unit, the quantity demanded will decrease by 2 units.

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