Question

5) The demand for a good varies A) directly with the prices of substitutes and also directly with the prices of complements. B) directly with the prices of substitutes and inversely with the prices of complements. C) inversely with the prices of substitutes and directly with the prices of complements. D) inversely with the prices of substitutes and also inversely with the prices of complements. 11) Over the past decade technological improvements in producing computers have increased A) both the supply and the quantity supplied. B) the supply but not the quantity supplied. C) the quantity supplied but not the supply. D) neither the supply nor the quantity supplied. 17) When the price is below the equilibrium price, the quantity demanded A) is less than the equilibrium quantity. So is the quantity supplied. B) is less than the equilibrium quantity. The quantity supplied exceeds the equilibrium quantity. C) exceeds the equilibrium quantity. So does the quantity supplied. D) exceeds the equilibrium quantity. The quantity supplied is less than the equilibrium quantity. 18) Which of the following correctly describes how price adjustment eliminates a shortage? A) As the price rises, the quantity demanded decreases while the quantity supplied increases. B) As the price rises, the quantity demanded increases while the quantity supplied decreases. C) As the price falls, the quantity demanded decreases while the quantity supplied increases. D) As the price falls, the quantity demanded increases while the quantity supplied decreases.

Answer 1

5) The demand for a good varies

B) directly with the prices of substitutes and inversely with the prices of complements.

11) Over the past decade technological improvements in producing computers have increased

A) both the supply and the quantity supplied

17) When the price is below the equilibrium price, the quantity demanded

D) exceeds the equilibrium quantity. The quantity supplied is less than the equilibrium quantity.

18) Which of the following correctly describes how price adjustment eliminates a shortage?

A) As the price rises, the quantity demanded decreases while the quantity supplied increases.

Consider the diagram where when price increases Qd falls and converges to Q* and Qs increases and converges to Q*.