30. In a pure m arket econo m y, the govern m ent \' s pri m ary roles do not in
ID: 1181389 • Letter: 3
Question
30. In a pure market economy, the government's primary roles do not include:
A) protecting property rights.
B) enforcing contracts between private parties.
C) providing public goods such as national defense.
D) reallocating resources across the economy.
31. If a city government were to impose a ceiling price on rental prices in the downtown area:
A) quantity supplied would increase.
B) supply would increase.
C) an illegal market would likely emerge.
D) quantity demanded would decrease.
32. At any price below the equilibrium price:
A) the quantity demanded equals the quantity supplied in the market.
B) the quantity demanded exceeds the quantity supplied in the market.
C) demand exceeds supply in the market.
D) the quantity demanded is less than the quantity supplied in the market.
Use the following to answer question 48:
P
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
Qd
3
7
10
14
20
30
Qs
20
15
10
7
3
0
33. (Table) Using the data for the market for lattes in the table, at a price of $6.00:
A) there is a surplus of lattes.
B) there is a shortage of lattes.
C) consumers desire to buy exactly seven lattes.
D) there is no incentive for any participants in the market to change their action.
34. The more responsive buyers are to a change in price: A) the greater the price elasticity of supply.
B) the closer the price elasticity of demand is to one.
C) the greater the price elasticity of demand.
D) the smaller the price elasticity of demand.
35. If a price increase leads to a reduction in total revenue, then the price elasticity of demand over the range of that price change is:
A) inelastic.
B) elastic.
C) unitary.
D) less than one.
38. An inferior good is a good that:
A) is demanded by the average customer.
B) is reliable.
C) lasts an average amount of time.
D) has an income elasticity that is less than one.
36. If the price of gasoline increases 10% and quantity demanded decreases by 5%, then the demand curve for gasoline is:
A) inelastic. B) elastic.
C) unitary elastic.
D) a perfect substitutable good.
37. If a good has an elasticity of demand of 21, then we say the good is:
A) highly inelastic.
B) unitary elastic. C) not elastic.
D) highly elastic.
38. For inferior goods, when an individual's income decreases, quantity demanded for these goods increases.
A) True
B) False
P
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
Qd
3
7
10
14
20
30
Qs
20
15
10
7
3
0
Explanation / Answer
30) a
31) c
32) b
33) b
34) a
35) d
36) a
37) c
38) a
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