Question # 1

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.

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.

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

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

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 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

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

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

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