第二次经作业.docVIP

Homework 2 Due Date: 9-29-2011 1. 1. A shortage of OPEC oil at current market prices will increase oil prices because of: A) the law of elastic supply. B) the law of elastic demand. C) consumers will bid up the price of oil. D) all of the above. E) none of the above. 2. The market clearing price in a competitive market: A) is one that will be established immediately when buyers and sellers come together to the market. B) would persist if actually reached, but doesnt have much significance in real life, due to the lack of any forces tending to push the price to this level. C) has no significance at all in real life because analysis of competitive markets takes no account of incomes, tastes, or other factors that influence demand. D) will tend to be reached, although not necessarily immediately, because of the competitive forces set up whenever price is at any level other than equilibrium. E) has no application except where everyone is an economic person (homo economicus). 3. One reason that the quantity demanded of a good tends to rise as its price falls is that: A) the decrease in price shifts the supply curve downward. B) people feel a bit richer and increase their use of the good. C) demand has to rise to restore equilibrium after a price reduction. D) suppliers are willing to supply more at lower prices. E) the decrease in price shifts the demand curve upward. 4. A price at which the amount people wish to buy exceeds the amount that people wish to produce (given upward-sloping supply curves): A) lies above the equilibrium, market clearing price. B) lies below the market clearing price. C) will induce a shift in the demand schedule to achieve equilibrium. D) is impossible. E) is none of the above. 5. Given a fixed supply of lamb chops, a reduction in the price of pork chops (close substitutes) will tend to: A) shift the demand curve for lamb chops to the right. B) shift the demand curve for pork chops t