If, at the current price, there is a surplus of a good, then:

	A.	the quantity demanded is greater than the quantity supplied.
	B.	the market must be in equilibrium
	C.	the price is above the equilibrium price
	D.	Both A and C.

The law of supply reflects the fact that:

	A.	Suppliers can sell more goods at lower prices
	B.	Suppliers have an incentive to supply more at higher prices in order to maximize profits.
	C.	Suppliers need higher prices of a product to increase production to offset the increased opportunity costs that can occur at increased quantities
	D.	Both B and C

In a competitive market,equilibrium price is determined by

	A.	Government
	B.	Consumers
	C.	The interaction of supply and demand
	D.	Businesses

Which of the following increases the market supply of roses?

	A.	A decrease in energy costs
	B.	An increase in the price of roses
	C.	A decrease in the numberof rose producers
	D.	Both A and B

Which of the following shows how the Real Income Effect explains the Law of Demand?

	A.	that as price of a good increases, an individual's purchasing power decreases, therefore quantity demanded for that good increases
	B.	As income increases, the demand for a normal good increases
	C.	that as the price of a good increases, an individual's purchasing power increases, therefore quantity demanded for that good decreases
	D.	that as the price of a good decreases, an individual's purchasing power increases, therefore quantity demanded for that good increases

Lost surplus or value from efficient trades that do not happen is the definition of:

	A.	Consumer Surplus
	B.	Deadweightloss
	C.	Producer Surplus
	D.	Consumer Loss

What happens in the market for cigarettes if the government imposes a tax on cigarettes?

	A.	Equilibrium price decreases, and Equilibrium quantity decreases
	B.	Equilibrium price decreases and Equilibrium quantity increases.
	C.	Equilibrium price increases, and Equilibrium quantity decreases
	D.	Equilibrium price increases and Equilibrium quantity increases

Devon is deciding where to spend her vacation. If she goes to Maine , the trip will give her 6,000 units of utility and will cost her $200. If, instead, she travels to New Jersey, the trip will give her 2,000 units of utility and will cost her only $100.Devonwill do best:

	A.	going to Maine because her pleasure per dollar will be greater.
	B.	going to New Jersey because her total cost will be lower.
	C.	going to New Jersey because her pleasure per dollar will be greater.
	D.	going to Maine because her total pleasure will be greater.

The Law of Demand states that:

	A.	An increase in the price of a product will reduce the quantity demanded,
	B.	A decrease in the price of a product will increase the quantity demanded, ceteris paribus
	C.	An increase in demand for a product will increase the price of a product, ceteris paribus
	D.	Both B and C

If the number of sellers in the market increase then there will be a:

	A.	Shortage in the market at the new equilibrium price
	B.	Surplus in the market at the old equilibrium price
	C.	Surplus in the market at the new equilibrium price
	D.	Shortage in the market at the old equilibrium price

Other things remaining equal, as the relative price of a good x falls, people:

	A.	Consumer more of good X because the total utility from good X is higher than other goods
	B.	Consume more of good x because the marginal utility from good X is higher than other goods
	C.	Consume more of good x because the marginal utility per dollar from good x is higher than other goods.
	D.	Consume less of good x because the marginal utility per dollar from good x is lower than other goods

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Which of the following is NOT an effect of a price ceiling?

	A.	quality of the product increases
	B.	Shortages are created
	C.	Non-price factors like discrimination increase in relative importance
	D.	Black markets emerge