When the market price is higher than the equilibrium price, there is:

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1. When the market price is higher than the equilibrium price, there is: (Points: 5)
a surplus.
a shortage.
both a shortage and a surplus.
neither a shortage nor a surplus.

2. A decrease in demand means that quantity demanded falls: (Points: 5)
at least one price.
at a few prices.
at most prices.
at all prices.

3. If the market price is below equilibrium price, quantity demanded: (Points: 5)
is less than quantity supplied.
is equal to quantity supplied.
is greater than quantity supplied.
remains the same.

4. At equilibrium, quantity demanded __________ equals quantity supplied. (Points: 5)
always
usually
sometimes
never

5. When the market price is above equilibrium price, the market price will be driven: (Points: 5)
up by buyers.
up by sellers.
down by buyers
down by sellers.

6. Changes in demand are caused by each of the following EXCEPT changes in: (Points: 5)
income.
the prices of related goods and services.
tastes and preferences.
supply.

7. An increase in the price of a complement will result in a(n) __________ for the product. (Points: 5)
decrease in the quantity demanded
increase in the quantity demanded
decrease in the demand
increase in the demand

8. If coffee is a substitute for tea, and the price of coffee rises, what will happen? (Points: 5)
Demand for tea will decrease.
Demand for tea will increase.
The quantity demanded of coffee will rise.
The quantity demanded of tea will decrease.

9. The most important determinant of the degree of elasticity of demand is: (Points: 5)
whether or not the item is a big ticket item.
whether or not the item is a luxury or not.
how many uses the product has.
the availability of substitutes.

10. If a car dealership decides to offer a rebate to reduce the selling price of its cars and as a result finds an increase in its total revenues, then the demand for cars from this dealership is: (Points: 5)
price elastic.
price inelastic.
rebate inelastic.
unit elastic.

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