MICROECONOMICS QUIZ

Cross elasticity of demand measures consumer responsiveness to a change in the price of one good, in terms of the quantity demanded of some other good.

• True

• False

As the price of a product rises the product will become more elastic in demand, assuming that the demand curve for the product is a downward-sloping straight line.

• True

• False

Income elasticity of demand measures the responsiveness of quantity supplied to changes in price.

• True

• False

Scarcity is a problem only for the poor.

• True

• False

Macroeconomics studies the factors that change national employment and income.

• True

• False

Answering "What goods and services are produced?" automatically answers "How are goods and services produced?"

• True

• False

An example of the "How" one of the big economic questions is: "How does the nation decide who gets the goods and services that are produced?"

• True

• False

Market equilibrium occurs when supply is equal with demand and there is no tendency for the price to change.

• True

• False

Shortage is the difference between the quantity demanded and the quantity supplied in a market where the quantity supplied is greater than the quantity demanded.

• True

• False

When there is a floor price, the incomes of the producers are protected, and the government purchase any surpluses of good and services.

• True

• False