Question # 1

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

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

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

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

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

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

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

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

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

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 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

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