mikro 3

A ceiling price in a competitive market will result in persistent surpluses of a product.

False

A surplus of a product will arise when price is:

above equilibrium with the result that quantity supplied exceeds quantity demanded.

Products and services are scarce because resources are scarce.

True

The price elasticity of demand coefficient measures:

buyer responsiveness to price changes

The demand for a product is inelastic with respect to price if:

consumers are largely unresponsive to a per unit price change.

If the demand for product X is inelastic, a 4 percent increase in the price of X will:

decrease the quantity of X demanded by less than 4 percent.

A perfectly inelastic demand curve:

graphs as a line parallel to the vertical axis

If a demand for a product is elastic, the value of the price elasticity coefficient is:

greater then one

A market is in equilibrium:

if the amount producers want to sell is equal to the amount consumers want to buy.

If a product is in surplus supply, its price:

is above the equilibrium level.

The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore demand for X in this price range:

is elastic

In which of the following instances will total revenue decline?

price rises and demand is elastic

The law of supply indicates that:

producers will offer more of a product at high prices than they will at low prices

An effective ceiling price will:

result in a product shortage.

An effective price floor will:

result in a product surplus.