Question # 1

Which of the following is an example of a normative statement.

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Since this good is bad for you, you should not consume it.

this good is bad for you

If you consume this good you will get sick

People usually get sick after consuming this good

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

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Shift leftward

Shift right ward

Become flatter

Become steeper

When two goods are substitutes a shock that raises the price of one good causes the price of the other goods to.

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Remain unchanged

Decrease

Increase

Change in an unpredictable manner

Holding all other factors constant consumers demand more of a good the

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Higher its price

Lower its price

Steeper the downward slope of the demand curve

Steeper the upward slope of the demand curve

As the price of a good increases, the change in the quantity demanded can be shown by

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Shifting the demand curve leftward

Shifting the demand curve rightward

Moving down along the same demand curve

Moving up long the same demand curve

For a given positively sloped supply curve the price increase to consumers resulting from a specific tax imposed on sellers will be.

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Greater the more price elastic demand is

Greater the less price elastic demand is

Equal to the entire tax when demand is perfectly elastic

Equal to half of the tax whenever demand is unit elastic

The percentage change in the quantity demanded in response to a percentage change in the price is known as the.

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slope of the demand curve

Excess demand

Price elasticity of demand

All of the above

In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.

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Workers who wish to work at the minimum wage will have a difficult time finding jobs.

Firms will hire fewer workers than without the minimum wage law.

Some workers may lose their jobs as a result

Nothing will happen to the wage rate or employment

To determine the total demand for all consumers sum the quantity each consumer demands.

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At a given price

At all prices and then sum this amount across all consumers

Both a and b will generate the same total demand

None of the above

Most Microeconomic models assume that decision makers wish to.

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Make themselves as well off as possible

Act selfishly

Not cooperate with others

None of the above

A competitive equilibrium is described by

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A price only

A quantity only

The excess supply minus the exceess demand.

A price and a quantity

It is appropriate to use the supply and demand model if in a market.

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Everyone is a price taker with full information about the price and quantity of the good.

Firms sell identical products

Costs of trading are low

All of the above

Consumers and firms are known as price takers only it

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No market exists to determine the equilibrium price

they can set the market price

They cannot effect the market price

Excess demand exists

An increases in the demand curve for orange juice would be illustrated as a.

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Leftward shift of the demand curve

Right ward shift of the demand curve

Movement up along the demand curve

Movement down along the demand curve

If the price of orange juice rises 10% and as a result the quantity demanded falls by 8% the price elastic of demand for orange juice is.

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-1.25

Inelastic

Both a and b

Neither A nor B above

A vertical demand curve results in.

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No change in quantity when the supply curve shifts.

No change in price when the supply curve shifts

No change in the supply curve being possible

No change in quantity when the demand curve shifts.

The expression increase in quantity supplied is illustrated graphically as a.

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Leftward shift in the supply curve

Rightward shift in the supply curve

Movement up long the supply curve

Movement down along the supply curve

If the price of automobiles were to decrease substantially the demand curve for public transpiration would most likely.

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shift rightward

Shift leftward

Remain unchanged

Remain unchanged while quantity demanded would change

Equilibrium is defined as a situation in which.

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Neither buyers nor sellers want to change their behavior

No government regulations exist

Demand curves are perfectly horizontal

suppliers will supply and amount that buyers wish to buy

A Horizontal demand curve for a good could arise because consumers.

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Are irrational

Are not sensitive to price changes

View this good as identical to another good

Have no equivalent substitutes for this good

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