1-Assume there is a market for good X. If the price of a complementary good rises, the equilibrium price of good X will __________and equilibrium quantity of good X will ___________ .

a.decrease, increase

b.decrease, decrease

c.increase, increase

d.increase, decrease

2- A demand function is given by, Q = 100 - P. What is the point elasticity when P = $50?

a.-0.5

b.-1.5

c.-1

d.-2

3-Assume the government imposes an effective minimum wage (i.e., one above the equilibrium wage rate that would otherwise prevail in that market). Our supply and demand analysis implies?

A employment will decrease

B. an excess demand for workers exists

C. a surplus of wages will exist

d. employment will increase