Economics

If both the supply and the demand for a good increase, the market price will

• a. Rise only in the case of an inelastic supply function.

• b. Fall only in the case of an inelastic supply function

• c. Not be predictable with only these facts

• d. Rise only in the case of an inelastic demand function.

A supply curve illustrates the relationship between

• a. Price and quantity supplied

• b. Price and consumer tastes.

• c. Price and quantity demanded.

• d. Supply and demand.

As a business owner you have determined that the demand for your product is inelastic. Based upon this assessment you understand that

• a. Increasing the price of your product will increase total revenue

• b. Decreasing the price of your product will increase total revenue.

• c. Increasing the price of your product will have no effect on total revenue.

• d. Increasing the price of your product will increase competition

Which of the following could cause the change shown in the graph?

• a. A decrease in the price of the product.

• b. An increase in supply of the product.

• c. A change in consumer tastes.

• d. A decrease in the price of a substitute for the product

What will be the result on the equilibrium price for the product?

• a. Increase.

• b. Decrease.

• c. Remain the same.

• d. Cannot be determined

Which one of the following has an inverse relationship with the demand for money?

• a. Aggregate income

• b. Price levels.

• c. Interest rates.

• d. Flow of funds.

Which of the following market features is likely to cause a surplus of a particular product?

• a. A monopoly.

• b. A price floor.

• c. A price ceiling

• d. A perfect market.

A decrease in the price of a complementary good will

• a. Shift the demand curve of the joint commodity to the left.

• b. Increase the price paid for a substitute good.

• c. Shift the supply curve of the joint commodity to the left.

• d. Shift the demand curve of the joint commodity to the right.

Demand for a product tends to be price inelastic if

• a. The product is considered a luxury item.

• b. People spend a large percentage of their income on the product

• c. The population in the market area is large.

• d. Few good substitutes for the product are available

Which of the following has the highest price elasticity coefficient?

• a. Milk

• b. Macaroni and cheese.

• c. Bread.

• d. Ski boats.