Economists who use supply/demand models:
A. support the free market.
B. oppose the free market.
C. generally oppose the free market.
D. could support or oppose the free market.
Answer: D
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According to the graph above, which of the following will occur if a legal price ceiling is imposed at price X?
A. Shortages will occur B. Surpluses will occur C. Demand will increase D. Q1 will be purchased E. Supply will decrease
A firm could lower prices and still increase revenue if
A. elasticity of demand is equal to zero. B. demand is elastic. C. elasticity of demand is equal to unity. D. demand is inelastic.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
Holding supply constant, an increase in demand leads to
A) lower prices and higher quantity supplied. B) lower prices and lower quantity supplied. C) higher prices and higher quantity supplied. D) higher prices and lower quantity supplied.