Microeconomics

Which of the following statements about the law of demand is correct?

• As the price of a good or service increases, the quantity demanded decreases.
• As the price of a good or service increases, the quantity demanded increases.
• As the price of a good or service decreases, the quantity demanded decreases.
• The law of demand only applies to luxury goods.

Which of the following statements explains the law of supply?

• The law of supply states that the price of a good or service has no effect on the quantity supplied by producers.
• The law of supply states that as the price of a good or service increases, the quantity supplied by producers also increases, and vice versa.
• The law of supply states that as the price of a good or service decreases, the quantity supplied by producers also decreases, and vice versa.
• The law of supply states that as the price of a good or service increases, the quantity supplied by producers decreases, and vice versa.

Curve A represent which of the following?

• negative slope curve

• Supply

• Demand

• a slope of 0

Curve B represent which of the following?

• positive slope curve

• Supply

• Demand

• a slope of 0

A decrease in in quantity demanded results in:

• shift to the right

• movement upward and to the left

• shift to the left

• movement downward to the right

The movement from point B to point A shows:

• A decrease in supply

• An increase in supply

• A decrease in quantity supplied

• An increase in quantity supplied

The shift of demand curve A to demand curve B shows:

• a decrease in demand

• an increase in quantity demanded

• an increase in demand

• a decrease in quantity demanded

When is a market in equilibrium?

• A market is in equilibrium when the quantity demanded by buyers is greater than the quantity supplied by sellers.
• A market is in equilibrium when the quantity demanded by buyers is unrelated to the quantity supplied by sellers.
• A market is in equilibrium when the quantity demanded by buyers is equal to the quantity supplied by sellers.
• A market is in equilibrium when the quantity demanded by buyers is less than the quantity supplied by sellers.

When is there a shortage?

• Price is above equilibrium

• When price ceiling is above equilibrium

• Price is below equilibrium

• When price floor is above equilibrium

When is there a surplus?

• A surplus occurs when the quantity supplied exceeds the quantity demanded.
• A surplus occurs when there is no demand for the product.
• A surplus occurs when the quantity supplied is equal to the quantity demanded.
• A surplus occurs when the quantity demanded exceeds the quantity supplied.