If there are many substitutes for a good, its price elasticity of demand is likely to

increase with each marginal unit produced

be relatively high

be relatively low

depend on the prices of those substitutes

directly impact the demand for its substitutes

If the income elasticity of demand for a good is 2, then

quantity demanded and income decrease by 2 percent

quantity demanded increases by 2 percent while income increases by 1 percent

quantity demanded decreases by 2 percent while income increases by 2 percent

quantity demanded increases by 1 percent while income decreases by 2 percent

quantity demanded decreases by 2 percent while income increases by 1 percent

If the demand for a product is so great that firms are unable to fulfill all of the orders, what might it conclude?

The product is an inferior good.

There is a shortage, and the price is below equilibrium.

The product is experiencing diminishing marginal returns.

At the current price, the supply is greater than the demand.

Foreign governments recently placed a tariff on the product.

Which of the following is most likely to occur if a competitive market has moved from one equilibrium to another?

An increase in demand lowers the equilibrium price and increases the equilibrium quantity.

An increase in supply lowers the equilibrium price and increases the equilibrium quantity.

A decrease in demand and increase in supply will cause equilibrium price to increase but make equilibrium quantity indeterminate.

An increase in demand will decrease equilibrium price, quantity, and producer surplus.

An increase in supply increases the equilibrium price and quantity and lowers producer surplus.

What will happen to an economy that produces and imports a good if an import tariff is removed?

There will be a decrease in consumer surplus for domestic consumers.

Domestic producer surplus will increase.

The domestic consumption of the good will increase.

Both domestic production and imports will increase.

There will be some deadweight loss.