4. In the circular flow model, the resource market of the diagram portrays followings except:

a. The expenditure for household to buy goods and services.

b. The economic resources supplied by the households to the business firms

c. The expenditures for resources by the business firms

d. A flow of monetary values that represents costs to the firms but incomes to the households

5. If the price is below equilibrium:

a. A surplus of the good will occur in the short run.

b. Quantity demanded will exceed quantity supplied.

c. Quantity supplied will exceed quantity demanded.

d. No surplus of the goods will occur.

6. If products x and y are substitute, and the price of x increases, then:

a. The demand for both products will decline.

b. The demand for both products will increase.

c. The demand for y will decrease while the quantity demanded for x increases.

d. The demand for y will increase while the quantity demanded for x decreases.

7. If the price of good A is $10, the quantity demanded for good A is 12. If the price of good A is $16, the quantity demanded for good A is 6. The price elasticity of demand for good A (by using midpoint concept) is

a. 4.0.

b. 3.7.

c. 2.5.

d. 1.4.