1.Draw a standard normal supply and demand model to help you answer this question. The demand curve should have a slope of -1. The supply curve should have a slope of 1.

A price floor causes quantity demanded to be _____________ quantity supplied.

Group of answer choices

greater than

less than

exactly the same as the

2.Draw a standard normal supply and demand model to help you answer this question. The demand curve should have a slope of -1. The supply curve should have a slope of 1.

A price ceiling causes quantity demanded to be ____________ quantity supplied.

Group of answer choices

exact the same as

greater than

less than

3.If demand is highly inelastic relative to the supply curve and supply shifts to the right, then the equilibrium price will rise significantly while quantity will remain virtually constant.

Group of answer choices

True

False

4.In general, the greater the elasticity the:

Group of answer choices

smaller the responsiveness of price to changes in quantity.

smaller the responsiveness of quantity to changes in price.

larger the responsiveness of price to changes in quantity.

larger the responsiveness of quantity to changes in price.

5.Demand is said to be elastic when the:

Group of answer choices

change in quantity demanded is greater than the change in price.

percentage change in quantity demanded is less than the percentage change in price.

percentage change in quantity demanded is greater than the percentage change in price.

change in quantity demanded is less than the change in price.

6.Last week, the Wall Street Journal reported that Starbucks was set to raise some of its prices. The article stated that "mass-market grocery brands such as Kraft Foods Inc.'s Folgers and Maxwell House coffees tend to be much more price-elastic" than Starbucks' coffees. This information about elasticities is telling us that:

Group of answer choices

Starbucks and the grocery brands are poor substitutes.

Starbucks' customers are not as responsive to price changes as are the customers of the grocery brands.

Starbucks and the grocery brands are close substitutes.

Starbucks' coffee is a luxury good, while the grocery brands are inferior goods.

7.The demand for a good is perfectly inelastic. Which of the following would be an explanation for this?

Group of answer choices

The good is specifically defined.

The good is a necessity.

The good is a large portion of one's total income.

The time interval considered is long.

8.The demand for a good is elastic. Which of the following would be the most likely explanation for this?

Group of answer choices

The time interval considered is short.

The good is a large portion of one's total income.

The good is a necessity.

The good is broadly defined.