Multiple Choice
1,Equilibrium
a,is a concept unique to economics.
b,always occurs where supply equals
demand.
c,results when opposing forces fail to
cancel each other out.
d,indicates balance.
e,all of the above
2,In the supply and demand model,
equilibrium occurs when
a,all buyers and sellers are satisfied with
their respective quantities at the market
price.
b,supply and demand intersect.
c,quantity supplied equals quantity demanded.
d,the price has no tendency to change.
e,all of the above
3,A price above equilibrium price
will lead to a(n)
a,surplus.
b,shortage.
c,excess demand.
d,price increase.
e none of the above
4,To have an effect on a market,
a price ceiling must
a,be above equilibrium.
b,be equal to equilibrium.
c,be below equilibrium.
d,result in a surplus.
e none of the above
5,The socially optimal quantity
maximizes
a,economic surplus.
b,producer surplus.
c,consumer surplus.
d,quantity demanded.
e quantity supplied,
6,When is it not possible for
individuals to arrange a
transaction that creates additional
economic surplus? When
a,price is above equilibrium.
b,price is below equilibrium.
c,price is at equilibrium.
d,there is a shortage.
e there is a surplus
7,When a firm pollutes,
a,markets will be efficient.
b,the output level is socially optimal.
c,the Smart-For-One-is-Sometimes Dumb-
for-All Principle does not hold.
d,the output level is above the socially
optimal level.
e,the output level is below the socially
optimal level
8,An increase in price will
a,decrease demand.
b,decrease quantity demanded.
c,increase demand.
d,increase quantity demanded.
e,not affect quantity demanded
9,An increase in the price of a
complement will
a,decrease demand.
b,decrease quantity demanded.
c,increase demand.
d,increase quantity demanded.
e,not affect quantity demanded,
10,If an increase in income leads
to a decrease in the demand for a
good,the good is a(n)
a,substitute good.
b,complementary good.
c,inferior good.
d,normal good.
e,superior good