1-If both the demand and supply increase, the equilibrium quantity

Select one:

a.decreases and the price rises.

b.decreases and the effect on price is indeterminate.

c.increases and the price falls.

d.increases and the effect on price is indeterminate.

2-Demand is inelastic if

Select one:

a.the good in question has close substitutes.

b.the good in question is a luxury.

c.an increase in price raises the total revenue.

d.large shifts of the supply curve lead to only small changes in price.

3- If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Select one:

a.The price will rise but the quantity could either increase, decrease, or remain the same.

b.Both the price and the quantity will increase.

c.The price will fall but the quantity will increase.

d.The quantity will increase but the price could either rise, fall, or remain the same.

4-Demand is inelastic if

Select one:

a.the price elasticity of demand is greater than 1.

b.the price elasticity of demand is less than 1.

c.the quantity demanded is very responsive to changes in price.

d.a large change in quantity demanded results in a small change in price.

5-Which of the following does NOT shift the supply curve?

Select one:

a.a decrease in the wages of labor used in production of the good

b.an increase in the price of the good

c.a technological advance

d.a fall in the price of a substitute in production

6- When the price is below the equilibrium price, the quantity demanded

Select one:

a.exceeds the equilibrium quantity. The quantity supplied is less than the equilibrium quantity.

b.exceeds the equilibrium quantity. So does the quantity supplied.

c.is less than the equilibrium quantity. So is the quantity supplied.

d.is less than the equilibrium quantity. The quantity supplied exceeds the equilibrium quantity.