EC1301-2009-2 - 2008/2009 EC 1301 Principles of Economics...

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2008/2009 EC 1301 Principles of Economics Semester 2 Tutorial No. 2 For Week Beginning 2 nd February Multiple-Choice Questions Use the following diagram to answer questions 1-5. P 16 12 D1 10 8 4 D2 2 4 6 8 12 20 1. The slope of the demand curve D1 is ___ and of the demand curve D2 is ___ . a. 1/2, 2 b. 2, 1/2 c. 5/4, 4/5 d. 4/5, 5/4 e. None of the above. 2. When the P = 8, the price elasticity of demand for the demand curve D1 is ___ and D2 is ___ . a. 4, 1 b. 1, 4 c. 4, 4 d. 1, 1 e. None of the above. 3. The cross price elasticity of demand for x is found to be -0.7. This means x a. is a normal good. b. has inelastic demand. c. is a complementary good. d. has a substitute good e. is an inferior good.
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4. In a free market, if the price of a good is above the equilibrium price, then a. government needs to set a higher price. . b. suppliers, dissatisfied with growing inventories, will raise the price. c. demanders, wanting to ensure they acquire the good, will bid the price lower.
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This note was uploaded on 02/27/2009 for the course ECONOMICS ec1301 taught by Professor Roland during the Spring '09 term at National University of Singapore.

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EC1301-2009-2 - 2008/2009 EC 1301 Principles of Economics...

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