Question # 1

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

If price is initially above the equilibrium level.

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the supply curve will shift rightward

The supply curve will shift letward

Excess supply exists

All firms can sell as much as they want

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

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

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shift rightward

Shift left eard

Remain unchanged

Become steeper

Economists tend to judge a model based upon

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the realty of its assumptions

The accuracy of its predications

Its simplicity

Its complexity

A specific tax on sellers will

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shift the demand curve to the right

Shift the demand curve the left

Shift the supply curve to the right

Shift the supply curve to the left

The purpose of making assumptions in economic model building is to.

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Force the model to yield the correct answer

Minimize the amount of work an economist must do

simplify the model while keeping important details.

Express the relationship mathematically.

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

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

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