Tom is having trouble drawing traditional supply and demand curves. What do you tell him about the demand curve?

Select one:

a. Price is measured on the vertical axis.

b. The curve has a negative slope.

c. Quantity is measure on the horizontal axis.

d. The curve shifts if something other than price changes.

e. All of the above.

If the income of renters is falling what should happen to the equilibrium monthly rent of an apartment if it is a normal good?

Select one:

a.Rentsshouldriseasdemandisfalling.

b.Rentsshouldfallassupplyisdecreasing.

c.Rentsshouldfallasdemandisdecreasing.

d.Rentsshouldriseassupplyisincreasing.

e.Rentsshouldriseasdemandisincreasing.

Assume that the market for shower curtains is suffering a shortage. How will the market move to equilibrium?

Select one:

a. Quantity demanded will rise and quantity supplied will fall as price increases.

b. Quantity demanded will fall and quantity supplied will fall as price decreases.

c. Quantity demanded will fall and quantity supplied will rise as price increases.

d. Quantity demanded will rise and quantity supplied will rise as price increases.

e. Quantity demanded will fall and quantity supplied will rise as price decreases.

For Angie, a ten percent rise in the price of flowers results in her quantity demanded of flowers to fall by less than ten percent, then we can say for flowers her demand is:

Select one:

a. elastic.

b. unitary elastic.

c. inelastic.

d. non-binding.

e. counter cyclical.

The Acme Corporation in Bugs Bunny cartoon is a pure monopoly. As such it:

Select one:

a. is defined as the only seller in the market.

b. has no close substitutes for its product.

c. faces no new entrants into the markets in which it sells.

d. may earn an economic profit in the long run.

e. All of the above.

The term "homo economicus" refers to which of the following people?

Select one:

a. Henry, who has waited until the last minute to make an economic decision.

b. Kevin, who buys a stock today because the price of the stock is higher than it was yesterday.

c. Calvin, who eats a bowl full of peanuts before dinner and thus ruins his appetite for dinner.

d. Kenny, who rationally weighs all of his options before spending his money.

e. George, who ignores negative information about stocks he has previously purchased.