Answer the following questions true (T) or false (F)
1. If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.
2. If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.
3. If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.
1. FALSE
2. TRUE
3. FALSE
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To maintain profit, entrepreneurs must:
A. maintain only one product. B. continually improve their products. C. eliminate all competition. D. keep raising prices.
Which statement is TRUE about a comparison of economic freedom with political freedom?
A) Economic freedom is more important than political freedom when considering positive economic growth. B) Economic freedom leads to positive economic growth while political freedom leads to negative economic growth. C) Political freedom is more important than economic freedom when considering positive economic growth. D) Economic freedom cannot exist without political freedom.
Which of the following is correct about a consumer's optimization problem:
A. In order for a consumer to not be optimizing at a corner solution, it is necessary for us to assume that all goods are essential. B. In order for a consumer to not be optimizing at a corner solution, it is sufficient for us to assume that all goods are essential. C. In order for a consumer to not be optimizing at a corner solution, it is necessary and sufficient for us to assume that all goods are essential. D. None of the above.
Which of the following is false? a. The price elasticity of demand measures the responsiveness of quantity demanded to a change in price
b. The price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price. c. If demand is elastic, it means the quantity demanded changes by a relatively larger amount than the price change. d. All of the above are true.