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

If the price in a market is fixed by the government above equilibrium ?

A. There is excess equilibrium
B. There is excess supply
C. There is excess demand
D. There is equilibrium

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

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

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

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

The price mechanism does not act as a ?

A. Signal
B. Incentive
C. Rationing device
D. Indicator of income

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

Suppose consumer tastes shift toward the consumption of apples Which of the following statements is an accurate description of the impact of this event on the market for apples ?

A. there is an increase in the quantity demanded of apples and in the supply for apples
B. there is an increase in the demand and supply of apples.
C. there is an increase in the demand for apples and a decrease in the supply of apples
D. there is a decrease in the quantity demanded of apples and an increase in the supply for apples

An inferior good is one for which an increase in income causes a(n) ?

A. Decrease in supply
B. Increase in demand
C. Increase in supply
D. Decrease in demand