1.According to the law of supply, what happens when the price of a good increases?

a.People are willing to buy what is supplied.

b.The supply curve flattens out.

c.The supply curve shifts to the left.

d.The quantity supplied increases.

2.Assume that milk is an inferior good. Assuming all other factors remain constant, if the income of milk buyers increases, what will happen to the equilibrium price and quantity of milk?

A.Price will increase, but we cannot determine what happens to quantity.

B.We cannot determine what happens to price, but quantity will increase

C.Equilibrium price will not change.

D.Price will decrease and quantity will decrease.

3.Under what conditions will total economic surplus change the most in a market as a result of a change in demand?

A. When supply is very elastic and demand is very inelastic.

B. When supply is very inelastic and demand is very inelastic.

C. When supply is very elastic and demand is very elastic.

D. When supply is perfectly inelastic and demand is elastic.