1. If the supply of a good is inelastic,
a. producers will not change their quantity supplied by much if the market price doubles.
b. a small increase in price will lead producers to sharply increase their quantity supplied.
c. producers will increase their quantity supplied in response to sharp drops in the market price.
d. producers have diminishing marginal returns of labor.
2. On what kinds of goods do governments generally place price ceilings?
a. those that are cheap but could become more expensive without the ceiling
b. those that are not necessary but have become customary
c. those that are essential and cheap
d. those that are essential but too expensive for some consumers
3. In response to rising car traffic, demand for bicycles has increased. The new equilibrium point will show
a. more bicycles sold, but at a higher price.
b. fewer bicycles sold, but at a higher price.
c. more bicycles sold, but at a lower price.
d. no change in the number of bicycles sold.
4. How has deregulation helped consumers in some industries?
a. by raising prices
b. by raising costs
c. by creating more barriers to entry
d. by lowering prices
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