The price of a good always changes when
A) either a shortage or a surplus occurs.
B) quantity demanded and quantity supplied are constant.
C) there is an increase in demand and an increase in supply.
D) there is a decrease in demand and a decrease in supply.
Ques. 2The value of the best alternative sacrificed to obtain something you want is referred to as
A) explicit cost.
B) opportunity cost.
C) marginal cost.
D) sunk cost.
Ques. 3An increase in quantity demanded is caused by
A) an increase in income.
B) a decrease in the price of the good.
C) a decrease in the price of a complement.
D) a change in expectations about price in the future.
Ques. 4A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service.
B) the price system will under-allocate resources to the production of that good or service.
C) the market supply will be too high.
D) the market demand will be too high.
Ques. 5Economists assume people behave rationally, which means that people
A) never make a mistake.
B) do not intentionally make decisions that make themselves worse off.
C) have the necessary information to always make correct decisions.
D) always understand the consequences of their decisions.
Quick Reply
