Directions: Read the sentences carefully. Encircle the correct answer.

1. An increase in the price of electricity bill will force you to:

a. increase your demand for kerosene heaters and coal.

b. increase your demand for light bulbs and aircon.

c. increase your demand for stereos and videokes.

d. increase your demand for TVs and use of gadgets.

2. The market demand curve for apple shows the

a. effect on market supply of a change in the demand for apple

b. quantity of an apple that consumers like to buy at different prices.

c. marginal cost of producing and selling different quantities of an apple.

d. effect of advertising expenditures on the market price of an apple.

3. Economies experience an increased in unemployment and a reduced of activity during recession. How does recession affect the market demand for new cars?

a. Demand for new cars shifts to the right.

b. Demand for new cars shifts to the left.

c. Demand for new cars has no shift

d. Demand for new cars either has or no shift 4. The market supply curve for gasoline shows the

a. effect on market demand of a change in the supply of gasoline

b. quantity of gasoline that firms offer for sale at different prices

c. quantity of gasoline that consumers are willing to buy at different prices.

d. All of the above

5. If Toyota firm is producing a car faster than people want to buy, there is.

a. an excess supply of car and price can be expected to decrease

b. . an excess supply of car and price can be expected to increase.

c. an excess demand of car and price can be expected to decrease

d. an excess demand of car and price can be expected to increase