Question # 1

A vertical demand curve for a particular good implies that consumers are.

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Sensitive to changes in the price of that good

Not sensitive to changes in the price of that good.

Irrational

Not interested in that 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

If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.

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a price of zero

An increase in price

A decrease in price

No change in price

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

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

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.

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

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

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

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

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

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