801. An increase in income will ?
A. Lead to a movement along the demand curve
B. Shift the supply curve
C. Shift the demand curve
D. Lead to an extension of demand

802. A shift in supply will have a bigger effect on price than output if demand is ?
A. income elastic
B. income inelastic
C. Price elastic
D. Price inelastic

803. If the price was fixed below the equilibrium price there would be ?
A. Excess supply
B. Excess demand
C. Equilibrium
D. Downward pressure on prices

804. A subsidy paid to producers ?
A. Shifts the supply curve
B. shifts the demand curve
C. Leads to a contractions in supply
D. Leads to an extension of supply

805. The price mechanism cannot ?
A. Act as a signal
B. Act as a incentive
C. Act as a rationing device
D. shift the demand curve

806. The price mechanism does not act as a ?
A. Signal
B. Incentive
C. Rationing device
D. Indicator of income

807. A shift in demand will have more effect on price than quantity if ?
A. The price elasticity of supply is + 3
B. The price elasticity of supply is + 0.2
C. The price elasticity of supply is + 2
D. The price elasticity of supply is infinity

808. A decrease in demand for a products should ?
A. increase equilibrium price and quantity
B. Decrease equilibrium price and quantity
C. Increase equilibrium price and decrease quantity
D. Decrease equilibrium price and increase quantity

809. Income inequality can be high in the free market and should be reduced This is an example of What ?
A. Judicial economic statement
B. Positive economic statement
C. Formative economic statement
D. Normative economic statement

810. A positive externality occurs when ?
A. The social marginal costs are higher than the private marginals costs
B. A product is not provided in the free market
C. The social marginal cost equal the social marginal benefit
D. The social marginal benefits are higher than the private marginal benefits


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