1.Which of the following events would correctly describe the outcome in a competitive market?

a.An increase in demand, ceteris paribus, causes a decrease in equilibrium price and quantity.

b.An increase in supply, ceteris paribus, causes a decrease in equilibrium price and an increase in equilibrium quantity.

c.An increase in supply, ceteris paribus, causes an increase in equilibrium price and a decrease in equilibrium quantity.

d.An increase in demand, ceteris paribus, causes an increase in equilibrium price, but a decrease in equilibrium quantity.

e.A decrease in demand, ceteris paribus, causes an increase in equilibrium price but an indeterminate change in equilibrium quantity.

2.Which of the following draws the demand line?

a.Marginal cost

b.Marginal benefit c.

Marginal benefit per dollar

d.Diminishing marginal returns

e.increasing opportunity costs

3.Sprockets are known to have relatively elastic demand when their price increases from $1 to $2. What must be true of the change in quantity demanded over this price range?

a.it decreases by more than 100 percent.

b.It increases by more than 100 percent.

c.It decreases by less than 100 percent.

d. It increases by less than 100 percent.

e. It decreases by an indeterminate amount.