Econ Test 1
A price ceiling means that A) government is imposing a legal price that is typically above the equilibrium price. B) there is currently a surplus of the relevant product. C) government wants to stop a deflationary spiral. D) government is imposing a legal price that is typically below the equilibrium price.
X
An effective price ceiling will A) induce new firms to enter the industry. B) result in a product surplus. C) clear the market. D) result in a product shortage.
X
If a legal ceiling price is set above the equilibrium price, A) a black market will evolve. B) a shortage of the product will occur .C) a surplus of the product will occur. D) neither the equilibrium price nor the equilibrium quantity will be affected.
X
If an effective ceiling price is placed on hamburgers, then A) the price charged will be below the market-clearing price. B) a black market for hamburgers may evolve. C) the quantity demanded will exceed the quantity supplied. D) All of these are likely outcomes.
X
Price floors and ceiling prices both A) cause the supply and demand curves to shift until equilibrium is established. B) cause surpluses. C) interfere with the rationing function of prices.D) cause shortages.
X
Refer to the diagram. An effective government-set price floor is best illustrated by A) price B. B) price C. C) quantity E. D) price A.
X
If price is above the equilibrium level, competition among sellers to reduce the resulting A) shortage will decrease quantity demanded and increase quantity supplied. B) surplus will decrease quantity demanded and increase quantity supplied. C) shortage will increase quantity demanded and decrease quantity supplied . D) surplus will increase quantity demanded and decrease quantity supplied.
. D) surplus will increase quantity demanded and decrease quantity supplied.
If Z is an inferior good, an increase in money income will shift the A) supply curve for Z to the right. B) supply curve for Z to the left .C) demand curve for Z to the left. D) demand curve for Z to the right.
.C) demand curve for Z to the left.
Graphically, the market demand curve is A) greater than the sum of the individual demand curves. B) the vertical sum of individual demand curves .C) the horizontal sum of individual demand curves. D) steeper than any individual demand curve that is part of it.
.C) the horizontal sum of individual demand curves.
Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn? A) C only B) B and C C) D only D) B only
A) C only
Which of the following is not characteristic of the demand for a commodity that is 100) elastic? A) Total revenue increases if price is increased. B) The elasticity coefficient is greater than one. C) The relative change in quantity demanded is greater than the relative change in price. D) Buyers are relatively sensitive to price changes.
A) Total revenue increases if price is increased.
In which of the following statements are the terms "demand" and "quantity demanded" used correctly? A) When the price of ice cream rose, the quantity demanded of ice cream fell, and the demand for ice cream toppings fell. B) When the price of ice cream rose, the demand for both ice cream and ice cream toppings fell. C) When the price of ice cream rose, the demand for ice cream fell, and the quantity demanded of ice cream toppings fell. D) None of these statements use the terms correctly.
A) When the price of ice cream rose, the quantity demanded of ice cream fell, and the demand for ice cream toppings fell.
If two goods are complements, A) an increase in the price of one will increase the demand for the other. B) they are necessarily inferior goods. C) a decrease in the price of one will increase the demand for the other. D) they are consumed independently.
A) an increase in the price of one will increase the demand for the other.
A perfectly inelastic demand schedule A) can be represented by a line parallel to the vertical axis. B) rises upward and to the right but has a constant slope. C) cannot be shown on a two-dimensional graph. D) can be represented by a line parallel to the horizontal axis.
A) can be represented by a line parallel to the vertical axis.
The rationing function of prices refers to the A) capacity of a competitive market to equalize quantity demanded and quantity supplied. B) ability of the market system to generate an equitable distribution of income. C) tendency of supply and demand to shift in opposite directions. D) fact that ration coupons are needed to alleviate wartime shortages of goods.
A) capacity of a competitive market to equalize quantity demanded and quantity supplied.
If X is a normal good, a rise in money income will shift the A) demand curve for X to the right. B) demand curve for X to the left. C) supply curve for X to the left. D) supply curve for X to the right.
A) demand curve for X to the right.
Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information we canconclude that A) demand for clothing has grown faster than the supply of clothing. B) the supply of clothing has grown faster than the demand for clothing. C) the supply of and demand for clothing have grown by the same proportion. D) there is no way to determine what has happened to supply and demand with this information.
A) demand for clothing has grown faster than the supply of clothing
n the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand(D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. If X is a normal good, an increase in income will A) increase D, increase P, and increase Q. B) increase D, increase P, and decrease Q. C) decrease D, increase P, and increase Q. D) increase S, increase P, and increase Q.
A) increase D, increase P, and increase Q.
At the current price, there is a shortage of a product. We would expect price to A) increase, quantity demanded to decrease, and quantity supplied to increase. B) increase, quantity demanded to increase, and quantity supplied to increase. C) increase, quantity demanded to increase, and quantity supplied to decrease. D) decrease, quantity demanded to increase, and quantity supplied to decrease.
A) increase, quantity demanded to decrease, and quantity supplied to increase.
If there is a surplus of a product, its price A) is above the equilibrium level. C) will rise in the near future. B) is in equilibrium. D) is below the equilibrium level
A) is above the equilibrium level.
The basic formula for the price elasticity of demand coefficient is A) percentage change in quantity demanded/percentage change in price. B) percentage change in price/percentage change in quantity demanded. C) absolute decline in price/absolute increase in quantity demanded. D) absolute decline in quantity demanded/absolute increase in price.
A) percentage change in quantity demanded/percentage change in price.
Refer to the diagram. An effective government-set price ceiling is best illustrated by A) price C. B) price B. C) price A. D) quantity E.
A) price C.
The demand curve shows the relationship between A) price and quantity demanded. B) money income and quantity demanded. C) price and production costs. D) consumer tastes and quantity demanded.
A) price and quantity demanded.
The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is A) price. B) incomes. C) expectations. D) preferences.
A) price.
If we say that a price is too high to clear the market, we mean that A) quantity supplied exceeds quantity demanded. B) the price of the good is likely to rise. C) quantity demanded exceeds quantity supplied. D) the equilibrium price is above the current price.
A) quantity supplied exceeds quantity demanded.
An improvement in production technology will A) shift the supply curve to the right. C) increase equilibrium price. B) shift the demand curve to the left. D) shift the supply curve to the left
A) shift the supply curve to the right.
If the price of product L increases, the demand curve for close-substitute product J will A) shift to the right. B) remain unchanged. C) shift to the left. D) shift downward toward the horizontal axis.
A) shift to the right.
In 2007, the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are A) substitute goods, and the higher price for oil decreased the supply of natural gas. B) complementary goods, and the higher price for oil decreased the supply of natural gas. C) complementary goods, and the higher price for oil increased the demand for natural gas. D) substitute goods, and the higher price for oil increased the demand for natural gas.
A) substitute goods, and the higher price for oil decreased the supply of natural gas.
Other things equal, which of the following might shift the demand curve for gasoline to the left? A) the development of a low-cost electric automobile B) the discovery of vast new oil reserves in Montana C) an increase in the price of train and air transportation D) a large decline in the price of automobiles
A) the development of a low-cost electric automobile
When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement A) the income effect. B) an inferior good. C) the substitution effect. D) the rationing function of prices.
A) the income effect.
Increasing marginal cost of production explains A) why the supply curve is upsloping. B) the law of demand. C) why the demand curve is downsloping. D) the income effect.
A) why the supply curve is upsloping.
Which of the following is a consequence of rent controls established to keep housing 95) affordable for the poor? A) Apartment buildings are torn down in favor of office buildings, shopping malls, and other buildings where rents are not controlled. B) Less rental housing is available, as prospective landlords find it unprofitable to rent at restricted prices. C) The quality of rental housing declines as landlords lack the funds and incentive to maintain properties. D) All of these are consequences of rent controls.
B) Less rental housing is available, as prospective landlords find it unprofitable to rent at restricted prices.
A surplus of a product will arise when price is A) below equilibrium, with the result that quantity supplied exceeds quantity demanded. B) above equilibrium, with the result that quantity demanded exceeds quantity supplied. C) below equilibrium, with the result that quantity demanded exceeds quantity supplied. D) above equilibrium, with the result that quantity supplied exceeds quantity demanded.
B) above equilibrium, with the result that quantity demanded exceeds quantity supplied.
When the percentage change in price is greater than the resulting percentage change in 120) quantity demanded, A) a decrease in price will increase total revenue. B) an increase in price will increase total revenue. C) demand may be either elastic or inelastic .D) demand is elastic.
B) an increase in price will increase total revenue.
Markets, viewed from the perspective of the supply and demand model A) do not exist in the real-world economy. B) assume many buyers and many sellers of a standardized product. C) are approximated by markets in which a single seller determines price. D) assume market power so that buyers and sellers bargain with one another.
B) assume many buyers and many sellers of a standardized product.
An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that A) there are few goods that are substitutes for bicycles. B) bicycles are normal goods. C) there are many goods that are complementary to bicycles. D) there are many goods that are substitutes for bicycles.
B) bicycles are normal goods
If the demand for steak (a normal good) shifts to the left, the most likely reason is that A) the price of cattle feed has gone up. C) the price of steak has risen. B) consumer incomes have fallen. D) cattle production has declined.
B) consumer incomes have fallen.
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will A) increase, quantity demanded will decrease, and quantity supplied will increase. B) decrease, quantity demanded will increase, and quantity supplied will decrease. C) decrease, quantity demanded will decrease, and quantity supplied will increase. D) decrease and quantity demanded and quantity supplied will both decrease.
B) decrease, quantity demanded will increase, and quantity supplied will decrease.
For a linear demand curve, A) elasticity is unity at every point on the curve. B) demand is elastic at relatively high prices. C) elasticity is constant along the curve. D) demand is elastic at relatively low prices.
B) demand is elastic at relatively high prices.
The relationship between quantity supplied and price is ________, and the relationship between quantity demanded and price is ________. A) direct; direct B) direct; inverse C) inverse; inverse D) inverse; direct
B) direct; inverse
When the price of oil declines significantly, the price of gasoline also declines. The latter occurs because of a(n) A) increase in the demand for gasoline. B) increase in the supply of gasoline. C) decrease in the demand for gasoline. D) decrease in the supply of gasoline.
B) increase in the supply of gasoline.
A recent study found that an increase in the federal tax on beer (which would increase 14) the price of beer) would reduce the demand for marijuana. Based on this informationwe can conclude that A) beer and marijuana are complementary goods. B) marijuana is an inferior good. C) beer is an inferior good. D) beer and marijuana are substitute goods.
B) marijuana is an inferior good.
The law of supply indicates that, other things equal, A) the product supply curve is downsloping. B) producers will offer more of a product at high prices than at low prices. C) producers will offer more of a product at low prices than at high prices. D) consumers will purchase less of a good at high prices than at low prices.
B) producers will offer more of a product at high prices than at low prices.
A leftward shift of a product supply curve might be caused by A) an improvement in the relevant technique of production. B) some firms leaving an industry. C) a decline in the prices of needed inputs. D) an increase in consumer incomes.
B) some firms leaving an industry.
If there is a shortage of product X, and the price is free to change, A) the price of the product will decline. B) the price of the product will rise. C) the supply curve will shift to the left and the demand curve to the right, eliminating the shortage. D) fewer resources will be allocated to the production of this good.
B) the price of the product will rise.
Refer to the diagram. A shortage of 160 units would be encountered if price was A) $1.10, that is, $1.60 minus $.50. C) $0.50. B) $1.00. D) $1.60.
C) $0.50.
Refer to the diagram. A surplus of 160 units would be encountered if the price was A) $1.00. C) $1.60. B) $0.50 .D) $1.10, that is, $1.60 minus $.50.
C) $1.60.
Suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded 99) increases from 110 to 118. Then the absolute value of the price elasticity (using themidpoint formula) is A) 2.09. B) 4.00. C) 1.37. D) 3.94.
C) 1.37
Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software? A) D only B) A and D C) A only D) B only
C) A only
Which of the diagrams illustrate(s) the effect of a decrease in incomes on the market for second-hand clothing? A) C only B) A and C C) A only D) B only
C) A only
Which of the diagrams illustrates the effect of a governmental subsidy on the market for AIDS research? A) A only B) B only C) C only D) D only
C) C only
Which of the following statements is correct? A) If demand decreases and supply increases, equilibrium price will rise. B) If demand increases and supply decreases, equilibrium price will fall. C) If supply increases and demand decreases, equilibrium price will fall. D) If supply declines and demand remains constant, equilibrium price will fall.
C) If supply increases and demand decreases, equilibrium price will fall.
Which of the following would not shift the demand curve for beef? A) a widely publicized study that indicates beef consumption increases one's cholesterol B) a change in the incomes of beef consumers C) a reduction in the price of cattle feed D) an effective advertising campaign by pork producers
C) a reduction in the price of cattle feed
Economists use the term "demand" to refer to A) a particular price-quantity combination on a stable demand curve. B) the total amount spent on a particular commodity over a fixed time period. C) a schedule of various combinations of market prices and amounts/quantities demanded. D) an upsloping line on a graph that relates consumer purchases and product price.
C) a schedule of various combinations of market prices and amounts/quantities demanded.
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the A) income effect. C) cost effect. B) substitution effect. D) inflationary effect.
C) cost effect.
An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the A) demand curve for cigarettes leftward. B) supply curve for cigarettes leftward .C) demand curve for cigarettes rightward. D) supply curve for cigarettes rightward.
C) demand curve for cigarettes rightward.
Because successive units of a good produce less and less additional satisfaction, the price must fall to encourage a buyer to purchase more units of the good. This statementis most consistent with which explanation for the law of demand? A) the income effect B) the substitution effect C) diminishing marginal utility D) the rationing function of prices
C) diminishing marginal utility
A normal good is one A) whose amount demanded will increase as its price increases. B) whose demand curve will shift leftward as incomes rise. C) for which the consumption varies directly with income. D) whose amount demanded will increase as its price decreases.
C) for which the consumption varies directly with income.
A price floor means that A) sellers are artificially restricting supply to raise price. B) government is imposing a maximum legal price that is typically below the equilibrium price. C) government is imposing a minimum legal price that is typically above the equilibrium price. D) inflation is severe in this particular market.
C) government is imposing a minimum legal price that is typically above the equilibrium price.
A market is in equilibrium A) provided there is no surplus of the product. B) whenever the demand curve is downsloping and the supply curve is upsloping. C) if the amount producers want to sell is equal to the amount consumers want to buy. D) at all prices above that shown by the intersection of the supply and demand curves.
C) if the amount producers want to sell is equal to the amount consumers want to buy.
If the demand and supply curves for product X are stable, a government-mandated 49) increase in the price of X will A) decrease the quantity supplied of X and increase the quantity demanded of X. B) increase the demand for X and decrease the supply of X. C) increase the quantity supplied of X and decrease the quantity demanded of X. D) increase the supply of X and decrease the demand for X.
C) increase the quantity supplied of X and decrease the quantity demanded of X.
Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will A) decrease, quantity demanded will decrease, and quantity supplied will increase. B) increase, quantity demanded will increase, and quantity supplied will decrease. C) increase, quantity demanded will decrease, and quantity supplied will increase. D) decrease and quantity demanded and quantity supplied will both decrease.
C) increase, quantity demanded will decrease, and quantity supplied will increase.
A market A) entails the exchange of goods, but not services. B) reflects upsloping demand and downsloping supply curves. C) is an institution that brings together buyers and sellers. D) always requires face-to-face contact between buyer and seller.
C) is an institution that brings together buyers and sellers.
The equilibrium price and quantity in a market usually produce allocative efficiency 62) because A) the excess of goods produced at equilibrium guarantees that all will have enough. B) equilibrium ensures an equitable distribution of output. C) marginal benefit and marginal cost are equal at that point. D) all consumers who want the good are satisfied.
C) marginal benefit and marginal cost are equal at that point.
The law of demand states that, other things equal, A) consumers will buy more of a product at high prices than at low prices. B) the larger the number of buyers in a market, the lower will be product price. C) price and quantity demanded are inversely related. D) price and quantity demanded are directly related.
C) price and quantity demanded are inversely related.
Black markets are associated with A) ceiling prices and the resulting product shortages. B) price floors and the resulting product shortages. C) price floors and the resulting product surpluses. D) ceiling prices and the resulting product surpluses.
C) price floors and the resulting product surpluses
Allocative efficiency is concerned with A) producing every good with the least-cost combination of inputs. B) reducing the concavity of the production possibilities curve. C) producing the combination of goods most desired by society. D) achieving the full employment of all available resources.
C) producing the combination of goods most desired by society.
A decrease in the price of digital cameras will A) not affect the demand for memory cards. B) cause the demand curve for memory cards to become vertical. C) shift the demand curve for memory cards to the right. D) shift the demand curve for memory cards to the left.
C) shift the demand curve for memory cards to the right.
At the point where the demand and supply curves for a product intersect, A) the quantity that consumers want to purchase and the amount producers choose to sell are the same. B) either a shortage or a surplus of the product might exist, depending on the degree of competition. C) the market may, or may not, be in equilibrium. D) the selling price and the buying price need not be equal.
C) the market may, or may not, be in equilibrium
If a firm can sell 3,000 units of product A at $10 per unit and 5,000 at $8, then A) A is a complementary good. B) the price elasticity of demand is 0.44. C) the price elasticity of demand is 2.25. D) A is an inferior good.
C) the price elasticity of demand is 2.25.
At the equilibrium price A) there are forces that cause price to fall. B) quantity supplied may exceed quantity demanded or vice versa. C) there are forces that cause price to rise. D) there are no pressures on price to either rise or fall.
C) there are forces that cause price to rise.
Which of the following is most likely to be an inferior good? A) ocean cruises B) gold watches C) used clothing D) steak
C) used clothing
The price elasticity of demand for widgets is 0.80. Assuming no change in the demand curve for widgets, a 16 percent increase in sales implies a A) 40 percent reduction in price. B) 1 percent reduction in price. C) 12 percent reduction in price. D) 20 percent reduction in price.
D) 20 percent reduction in price.
Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles? A) A only B) B only C) C only D) D only
D) D only
Which of the following will not cause the demand for product K to change? A) an increase in incomes of buyers of product K B) a change in consumer tastes for product K C) a change in the price of close-substitute product J D) a change in the price of product K
D) a change in the price of product K
Which of the following will cause the demand curve for product A to shift to the left? A) a decrease in the price of complementary product C B) an increase in money income if A is an inferior good C) population growth that causes an expansion in the number of persons consuming A D) an increase in money income if A is a normal good
D) an increase in money income if A is a normal good
Which of the following will cause a decrease in market equilibrium price and an increase in an equilibrium quantity? A) a decrease in supply C) a decrease in demand B) an increase in demand D) an increase in supply
D) an increase in supply
The price elasticity of demand coefficient measures A) how far business executives can stretch their fixed costs. B) the extent to which a demand curve shifts as incomes change. C) the slope of the demand curve. D) buyer responsiveness to price changes.
D) buyer responsiveness to price changes.
The demand for a product is inelastic with respect to price if A) a drop in price is accompanied by a decrease in the quantity demanded .B) a drop in price is accompanied by an increase in the quantity demanded. C) the elasticity coefficient is greater than 1. D) consumers are largely unresponsive to a per unit price change.
D) consumers are largely unresponsive to a per unit price change.
An increase in the price of a product will reduce the amount of it purchased because A) the higher price will signal to consumers that the good is of low quality. B) consumers will substitute other products for the one whose price has risen. C) the higher price means that real incomes have risen. D) consumers substitute relatively high-priced for relatively low-priced products.
D) consumers substitute relatively high-priced for relatively low-priced products.
If the demand for product X is inelastic, a 4 percent decrease in the price of X will A) increase the quantity of X demanded by less than 4 percent. B) increase the quantity of X demanded by more than 4 percent. C) decrease the quantity of X demanded by more than 4 percent. D) decrease the quantity of X demanded by less than 4 percent.
D) decrease the quantity of X demanded by less than 4 percent.
The price elasticity of demand of a straight-line demand curve is A) elastic but does not change at various points on the curve. B) inelastic but does not change at various points on the curve. C) 1 at all points on the curve. D) elastic in high-price ranges and inelastic in low-price ranges.
D) elastic in high-price ranges and inelastic in low-price ranges.
If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will A) increase the amount demanded by less than 10 percent. B) decrease the amount demanded by more than 10 percent. C) decrease the amount demanded by less than 10 percent. D) increase the amount demanded by more than 10 percent.
D) increase the amount demanded by more than 10 percent.
Over time, the equilibrium price of a gigabyte of computer memory has fallen, while the equilibrium quantity purchased has increased. Based on this we can conclude that A) increases in the demand for computer memory have exceeded increases in supply. B) decreases in the demand for computer memory have exceeded increases in supply. C) decreases in the supply of computer memory have exceeded increases in demand. D) increases in the supply of computer memory have exceeded increases in demand.
D) increases in the supply of computer memory have exceeded increases in demand.
A demand curve A) shows the relationship between income and spending .B) shows the relationship between price and quantity supplied .C) graphs as an upsloping line. D) indicates the quantity demanded at each price in a series of prices.
D) indicates the quantity demanded at each price in a series of prices.
The upward slope of the supply curve reflects the A) principle of specialization in production. B) law of diminishing marginal utility. C) fact that price and quantity supplied are inversely related. D) law of supply.
D) law of supply.
One reason that the quantity demanded of a good increases when its price falls is that 20) the A) lower price shifts the demand curve to the right.B) lower price shifts the demand curve to the left. C) price decline shifts the supply curve to the left. D) lower price increases the real incomes of buyers, enabling them to buy more.
D) lower price increases the real incomes of buyers, enabling them to buy more.
A firm's supply curve is upsloping because A) the expansion of production necessitates the use of qualitatively inferior inputs. B) consumers envision a positive relationship between price and quality. C) beyond some point, the production costs of additional units of output will rise. D) mass production economies are associated with larger levels of output.
D) mass production economies are associated with larger levels of output.
Refer to the diagram. A decrease in quantity demanded is depicted by a A) shift from D2 to D1. C) shift from D1 to D2. B) move from point x to point y. D) move from point y to point x.
D) move from point y to point x.
Refer to the diagram. Rent controls are best illustrated by A) quantity E. B) price C. C) price B. 85) D) price A.
D) price A
The location of the product supply curve depends on A) the location of the demand curve. C) the number of buyers in the market. B) the tastes of buyers. D) production technology.
D) production technology
An increase in product price will cause A) quantity demanded to decrease. C) the supply curve to shift to the left. B) quantity supplied to decrease. D) quantity demanded to increase
D) quantity demanded to increase
An effective price floor on wheat will A) force otherwise profitable farmers out of business. B) result in a shortage of wheat. C) clear the market for wheat. D) result in a surplus of wheat.
D) result in a surplus of wheat.
(reference SG) Refer to the diagram. A decrease in demand is depicted by a A) shift from D1 to D2. C) move from point x to point y. B) move from point y to point x. D) shift from D2 to D1.
D) shift from D2 to D1.
The larger the coefficient of price elasticity of demand for a product, the A) more rapid the rate at which the marginal utility of that product diminishes. B) larger the resulting price change for an increase in supply. C) less competitive will be the industry supplying that product. D) smaller the resulting price change for an increase in supply.
D) smaller the resulting price change for an increase in supply.
College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, theirconsumption of both goods frequently declines. This suggests that ramen noodles andboxed macaroni and cheese are A) normal goods. C) complementary goods. B) inferior goods. D) substitute goods.
D) substitute goods.
In which of the following instances is the effect on equilibrium price (whether it rises, 65) falls, or remains unchanged) dependent on the magnitude of the shifts in supply anddemand? A) demand rises and supply falls B) demand rises and supply rises C) supply falls and demand remains constant D) supply rises and demand falls
D) supply rises and demand falls
Allocative efficiency involves determining A) the optimal rate of technological progress. B) which production possibilities curve reflects the lowest opportunity costs. C) which output mix will result in the most rapid rate of economic growth. D) the mix of output that will maximize society's satisfaction.
D) the mix of output that will maximize society's satisfaction.
In moving along a demand curve, which of the following is not held constant? A) price expectations C) consumer incomes B) prices of complementary goods D) the price of the product itself.
D) the price of the product itself.
