1.A rise in the price of a good causes an decrease in its
a. supply
b. quantity supplied
c. quantity demanded
2.Assume that cotton and wool are substitutes. What will happen to the equilibrium price and quantity of cotton if the price of wool rises?
a. Both the equilibrium price and equilibrium quantity of cotton will increase
b. The equilibrium price of cotton will rise, but the equilibrium quantity will fall.
c. The equilibrium price of cotton will fall, but the equilibrium quantity will rise
3.Which of the following is NOT a common result of a lack of competition?
a. Reduced quantity
b. Collusion among firms
c. Greater efficiency
4.What will happen in the market for apartment rentals if the government imposes a price ceiling that is below the equilibrium price?
a. There will be a shortage of apartments
b. There will be a surplus of apartments
c. The market will continue to operate at equilibrium
