A market for a product is in disequilibrium when

I. consumers' demand for the product go unmet, pushing up prices

II. suppliers' products go unsold, pushing up prices

III. there isexcess demand for the product, pushing down prices

IV. there isexcess supply of the product, pushing down prices

Given the statements above, which of the following is correct.

a.

I and IV

b.

I only

c.

I and III

d.

I, II and IV

What does the supply curve illustrate?

a.

The quantity suppliers are willing and able to buy at all price levels all other things remain unchanged

b.

The quantity suppliers are willing and able to sell at all levels of production cost all other things remain unchanged

c.The quantity suppliers would like to buy

d.

The quantity suppliers are willing and able to sell at all price levels all other things remain unchanged

When a product accounts for a large portion of the consumer's income, the demand for the product is

a.

less elastic

b.

undefined

c.

neither elastic nor inelastic

d.

more elastic

Table 2

Combination Cotton Corn

A 12 16

B 17 15

C 21 13

D 23 9

E 24 5

From the data given in Table 2, the opportunity cost of increased cotton in moving from A to B is

a.

3 units of cotton

b.

15 units of corn

c.

1 unit of corn

d.

1 unit of cotton

The cross elasticity of demand of apples and oranges is defined as

a.

the percentage change in the price of apples demanded divided by the percentage change in the quantity of oranges demanded

b.

the change in the quantity of apples demanded divided by the change in the quantity of oranges demanded.

c.

the price elasticity of demand for apples divided by the price elasticity of demand for oranges

d.

the percentage change in the quantity of apples demanded divided by the percentage change in the price of oranges.

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

a.

0.67

b.

0.50

c.

2.00

d.

0.33

The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of

a.

neitherits complements nor its substitutes.

b.

its substitutes but not its complements

c.

its complements but not its substitutes.

d.

its complements and its substitutes.

If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent increase in the quantity demanded, the price elasticity of demand is

a.

0.300

b.

1.200

c.

0.182

d.

0.833

Hotdogs and hotdog rolls are complements. What will happen to the equilibrium price and quantity in the market for hotdog rolls if hotdogs become less expensive? The equilibrium price for hotdog rolls will

a.

Increase and the equilibrium quantity will increase

b.

Increase and the equilibrium quantity will decrease

c.

decrease and the equilibrium quantity will decrease

d.

decrease and the equilibrium quantity will increase