Question 1. If 12 units of a good are sold when the price is $1 per unit, and 8 units are sold at a price of $1.50 per unit, then demand is
a. elastic
b. inelastic
c. of indeterminate elasticity
d. unit elastic
Question 2. A change in demand would be illustrated by
a. a drop in price, which causes people to buy more
b. an increase in price, which causes people to buy less
c. a change in people's preference that causes them to buy either more or less than before
d. all of the above
Question 3. An example of a macroeconomics model is
a. the price of chicken influences the quantity of chicken bought
b. the size of the total national output depends on the size of total spending
c. the output of a product is influenced by the cost of production for the product
d. all of the above
Question 4. According to economics liberalism, the regulating force of the economy is
a. self-interest
b. laissez-faire
c. competition
d. the government
Question 5. To exercise the law of comparative advantage, a nation
a. must produce some goods using fewer resources than its trading partner
b. does not have to produce any goods using fewer resources than its trading partner
c. must produce some goods on an equal footing with its trading partner
d. must show a lower absolute cost of production than its trading partner