In which of the following situations will both market clearing price and the equilibrium quantity ...

In which of the following situations will both market clearing price and the equilibrium quantity increase?
 
  A) an increase in demand with no change in supply
  B) an increase in supply with no change in demand
  C) a decrease in supply with no change in demand
  D) a decrease in demand with no change in supply

---

Ques. 2

Which of the following can cause official unemployment figures to underestimate the true unemployment rate?
 
  A) Some people get discouraged and quit looking for a job.
  B) Some people engage in illegal activities.
  C) Some people work off the books.
  D) Some people work overtime.

---

Ques. 3

When negative externalities exist, the private market equilibrium represents a
 
  A) market price which is too low and a market quantity which is too low.
  B) market price which is too low and a market quantity which is too high.
  C) market price which is too high and a market quantity which is too low.
  D) market price which is too high and a market quantity which is too high.

---

Ques. 4

Reduction or elimination of dividend taxes is designed, in part, to
 
  A) reduce the double taxation burden on individuals.
  B) make rich people richer.
  C) reduce inefficiencies in the production process.
  D) increase corporate tax levels.

---

Ques. 5

Roses are more expensive on Valentine's Day than at other times of the year, yet sales of roses are highest on that day. How does economic theory account for this?
 
  A) An increase in demand pushes up the market clearing price of roses.
  B) People buying the roses are irrational.
  C) Roses are not subject to the law of demand.
  D) Florists know that there are no substitutes for roses, so they take advantage of consumers on Valentine's Day.

---

Ques. 6

If opportunity costs are constant, then
 
  A) the production possibilities curve does not exist.
  B) the production possibilities curve bows outward.
  C) the production possibilities curve is a negatively sloped straight line.
  D) factors of production must not be fully employed.

---

Ques. 7

The rationality assumption states that
 
  A) all actions taken by consumers are based on what is good for society.
  B) people make decisions regardless of how the outcome will affect them.
  C) people make decisions to buy only those goods that they need rather than goods that they want.
  D) people do not intentionally make decisions that would leave them worse off.

---

Ques. 8

For a normal good, an increase in consumer income will lead to I. a movement down the demand curve II. a rightward shift in the demand curve III. a reduction in supply
 
  A) I only
  B) II only
  C) III only
  D) Both II and III