Refer to the figure below. An increase in demand is represented by a shift from: 
A. curve D to curve C.
B. curve A to curve B.
C. curve C to curve D.
D. curve B to curve A.
Answer: C
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Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the
A) price elasticity of demand. B) the price elasticity of supply. C) income elasticity of demand. D) cross elasticity of demand.
When the money market is drawn with the value of money on the vertical axis, if money supply and money demand both shift to the right
a. the price level must have risen b. the price level must have fallen. c. the price level rises if money supply shifts farther than money demand. d. the price level falls if money supply shifts farther than money demand.
The opportunity cost of holding money is
A) the liquidity foregone. B) the higher interest rates that can be earned by holding a bond fund. C) the decrease in risk from holding money rather than a bond fund. D) the liquidity gained by holding ready cash.
Which of the following is a possible market solution to the lemons problem?
A) Producers might offer product guarantees and warranties. B) Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products. C) Government agencies might be charged with directly overseeing production and distribution of certain products. D) Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.