1. A shortage exists when

1. QD=QS
2. QD>QS
3. An act of God makes goods available at very low prices
4. QD

2. Economists argue that markets serve the interests of society primarily because

1. Money is made available for government
2. Consumers are made better off (regardless of whether producers are made better off)
3. Producers are made better off (regardless of whether consumers are made better off)
4. Both consumers and producers are made better off

3. If demand decreases and the price doesn't change, there will be

1. A surplus
2. A shortage
3. Neither a shortage nor a surplus
4. Both a shortage and a surplus

4. If supply decreases and the price doesn't change, there will be

1. A shortage
2. A surplus
3. Both a shortage and a surplus
4. Neither a shortage nor a surplus

5. If you are given $20 and told to go to the store and buy as many potatoes as you can, the reason your demand curve for potatoes is downward sloping has mostly to do with

1. Potatoes are low price goods
2. The substitution effects
3. Diminishing marginal utility
4. The real-balances effect

6. Since teachers are an input in the production of education, when teacher salaries increase,

1. The demand for education decreases
2. The supply of education increases
3. The supply of education decreases
4. The demand for teachers increases

7. The group of people who are willing to provide goods and services in exchange for money is called

1. Consumers
2. Profiteers
3. Producers
4. Benefactors

8. Which of the following is the best example of the concept of "compliment"?

1. Hotdogs and hotdog buns
2. Coke and Pepsi
3. Ramen noodles and water
4. SUVs and sunglasses

9. Which of the following is the best example of the concept of "substitute"?

1. Hot dogs and hot dog buns
2. Coke and Pepsi
3. Ramen noodles and water
4. SUVs and sunglasses

10. The market is said to be at equilibrium when

1. Quantity demanded and the quantity supplied are equal
2. The customer and supplier have equal choices
3. The demand and the supply are the same
4. The product is fairly priced by the supplier