Relative scarcities are indicated by :

Relative scarcities are indicated by
 
  A) supply and demand being out of equilibrium.
  B) surpluses.
  C) excess demand and excess supply.
  D) relative prices.

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Ques. 2

Refer to the above figure. The rightward shift of the curve indicates
 
  A) an increase in demand.
  B) a decrease in demand.
  C) an increase in quantity demanded.
  D) a decrease in quantity demanded.

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Ques. 3

The money demand function implies that money demand is
 
  A) positively related to interest rates.
  B) negatively related to bond prices.
  C) negatively related to interest rates.
  D) negatively related to transactions in the economy.

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Ques. 4

Ad valorem taxation
 
  A) refers to the personal income tax.
  B) is used to tax goods but not services.
  C) is assessed by charging a tax rate as a fraction of the market price of a good.
  D) is a tax that is applied only to cigarettes and alcohol.

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Ques. 5

Market failure means that
 
  A) the strike organized by unionized employees fails to achieve its goal.
  B) too many outdated products are offered for sale in the local supermarket.
  C) there is overallocation or underallocation of resources to certain economic activity.
  D) an unexpectedly harsh winter shuts down a factory.

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Ques. 6

Which of the following will tend to occur when a surplus exists in a market?
 
  A) supply will increase and demand will decrease until the surplus disappears.
  B) supply will decrease and demand will increase until the surplus disappears.
  C) the price will tend to rise over time.
  D) the price will tend to decrease over time.