1. A market is in equilibrium when
a.the quantity demanded equals the quantity supplied at the market price.
b.the horizontal axis crosses the vertical axis.
c. buyers don't want price to be any lower.
d.the equilibrium price is below the market price.
2. A shortage will occur whenever
a. price is set below the equilibrium price.
b.price is set above the equilibrium price.
c.price is set equal to the equilibrium price.
d. the supply curve is upward sloping.
3. An expected future increase in the price of gasoline may
a. increase demand now.
b. decrease demand now.
c. increase the supply of gasoline now.
d. make gasoline an inferior good.
4. An increase in quantity supplied can be caused by
technological change.
lower input prices.
a higher price on a substitute good.
an expectation that the price of the good will be lower in the future.
5. For normal goods, supply curves are
downward sloping.
upward sloping.
horizontal.
vertical.
6. If the government adopts a strong "tax the corporation" stance, we would expect
the supply curve in that industry to shift to the left.
the supply curve in that industry to shift to the right.
the demand curve for that industry to shift to the right.
the demand curve for that industry to shift to the left.
7. In economics, "demand" refers to
the intensity of desire for a good.
the amount of a good people need rather than the amount they want.
the satisfaction a good will provide a person.
the quantities of a good that people will buy at various prices.
8. Scalpers are able to charge a price above the market-clearing price because
pent-up demand for the product exists.
the government permits undersupply to occur.
supply is greater than demand.
the market clearing price has not yet been established.
9. Suppose that short skirts that were fashionable in the early 1990s become unfashionable in the late 1990s. If other factors were held constant, then there would be
a rightward movement along the supply curve.
a rightward shift of the demand curve.
a leftward shift in the demand curve.
a leftward movement along the supply curve.
10. The law of demand states that
consumers have unlimited demands for a good.
a higher price will lead to increased sales.
the price can never be too high for some consumers.
quantity demanded will vary inversely with the price of the good.