Multiple Choice Practice Flashcards
1
Q
If the price for a normal good decreases ?
A- demand will decrease
B- demand will increase
C- quantity demand will decrease
D- quantity demand will increase
A
D
2
Q
How would the price mechanism eliminate surplus
A
As the price falls, quantity demanded increases and quantity supplied decreases
3
Q
Demand curve shows
A
What people are willing and able to buy at each price, everything else unchanged
4
Q
What would be the effect on product A, if the price of the substitute product increased
A
Outward shift in demand curve for A
