Question 1

Equilibrium price implies that everyone who would like to purchase a product is able to.

Accepted Answer

A) True 
 B)False

Question 2

Explain how a market adjusts to an increase in the supply of a product.

Accepted Answer

An increase in the supply of a product w...

Question 3

Explain how a surplus will be eliminated.

Accepted Answer

A surplus occurs when the quantity deman...

Question 4

What is the income effect?

Accepted Answer

A)  The effect of a change in income on the demand for a product.
B)  The effect of a change in income on the demand for a substitute product.
C)  The effect of a price change on real income and therefore on the quantity demanded of a product.
D)  The effect of a change in income on the demand for an inferior product.E) A) and B)
F) C) and D)

Question 5

Which of the following is explained by the combination of the substitution effect and the income effect?

Accepted Answer

A)  The direct relationship between price and quantity demanded.
B)  The inverse relationship between price and quantity demanded.
C)  Market demand.
D)  Equilibrium price.E) B) and C)
F) A) and D)

Exam 2: Demand and Supply: An Introduction

Explain how a market adjusts to an increase in the supply of a product.

Correct Answer
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An increase in the supply of a product w...
View Answer

Explain how a surplus will be eliminated.

Correct Answer
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A surplus occurs when the quantity deman...
View Answer

Equilibrium price implies that everyone who would like to purchase a product is able to.

Correct Answer
verified

Which of the following is explained by the combination of the substitution effect and the income effect?

Correct Answer
verified

What is the income effect?

Correct Answer
verified

Exam 2: Demand and Supply: An Introduction

Explain how a market adjusts to an increase in the supply of a product.

Correct AnswerverifiedAn increase in the supply of a product w...View AnswerShow Answer

Explain how a surplus will be eliminated.

Correct AnswerverifiedA surplus occurs when the quantity deman...View AnswerShow Answer

Equilibrium price implies that everyone who would like to purchase a product is able to.

Correct AnswerverifiedShow Answer

Which of the following is explained by the combination of the substitution effect and the income effect?

Correct AnswerverifiedShow Answer

What is the income effect?

Correct AnswerverifiedShow Answer

Correct Answer
verified
An increase in the supply of a product w...
View Answer

Correct Answer
verified
A surplus occurs when the quantity deman...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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