Question 1 The quantity demanded for an item is the amount of that good or servi
ID: 1144044 • Letter: Q
Question
Question 1 The quantity demanded for an item is the amount of that good or service consumers are willing and able to buy at a specific price during a specific time period, with which of the following important qualifications?
a) “From many, one.” b) “You have the body.” C) “Buyer beware.” D) “Everything else held constant.”
Question 2: A market-clearing price only occurs in a market in equilibrium. True or False
3) If a shortage exists in the market, the invisible hand will manipulate prices to maintain equilibrium by
a) increasing prices and thereby reducing future quantity supplied.
b) decreasing prices and thereby reducing future quantity supplied.
c) decreasing prices and thereby increasing future quantity supplied.
d) increasing prices and thereby raising future quantity supplied.
4) The primary functions of price in a free market are to inform and direct consumers and firms. True or False
5) Price ceilings can cause a shortage if they are set
a) at the market-clearing price.
b) below the market-clearing price.
c) above the market-clearing price.
6) A market clearing condition occurs when price floors are set
a) at or below the equilibrium price
b) above the equilibrium price
C) at a price that yields a surplus
d) above the equilibrium price.
7) Unintended market conditions, including black markets and shortages, can occur through the price restraint of a price ceiling set above the market-clearing price. True or False
8) When comparing a good over a long time to the same good over a short period of time, the longer time period will demonstrate an elasticity of demand that is
a) higher.
b) equal to the price.
c) lower.
d) the same
9) Price elasticity of demand generally increases when a product’s price is a smaller percentage of available spending power. True or False
10) A product with low income elasticity will be affected less by falling wages than a product with high income elasticity. True or False
11) True or false. For two complementary products A and B, demand for complementary product B has an inverse relationship to price changes in complementary product A.
12) True or false. Price elasticity of supply will not change over time.
13) True or false. Raising prices on price-inelastic products will increase total revenues.
Explanation / Answer
1. The correct answer is D.
2. This is True.
3. The correct answer is D.
4. This is False.
5. The correct answer is B.
6. The correct answer is D.
7. This is False.
8. The correct answer is C.
9. This is False.
10. This is True.
11. This is True.
12. This is False.
13. This is True.
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