Econ Homework 3

The law of demand states that other things equal: a) as the price increases, the demand will decrease. b) as the price increases, the quantity demanded will decrease. c) as the price decreases, the demand curve will shift to the right. d) as the price increases, the quantity demanded will increase.

Which of the following factors would cause a movement along the demand curve for a particular good? a) a change in the prices of related goods b) a change in the price of that good c) both a change in the price of that good and a change in the size of the population d) a change in the size of the population

A shift of the demand curve for thin-crust pizza would not be caused by a change in: a) the price of thick-crust pizza. b) the price of thin-crust pizza. c) buyers' incomes. d) the popularity of thin-crust pizza.

If goods A and B are substitutes, a decrease in the price of good B will: a) increase the demand for good A. b) decrease the demand for good A. c) increase the demand for good B. d) increase the demand for good B and decrease the demand for good A.

If goods A and Z are complements, an increase in the price of good Z will: a) increase the demand for good A. b) decrease the demand for good A. c) decrease the demand for good Z. d) decrease the demand for both good A and good Z.

A good is inferior if which of the following is true? a) When income increases, the demand increases. b) When income increases, the demand decreases. c) Income and the demand are unrelated. d) When income increases, the demand remains unchanged.

The typical supply curve illustrates that: a) price and quantity supplied are unrelated. b) other things equal, the quantity supplied for a good is positively related to the price of a good. c) other things equal, the supply of the good creates its own demand for the good. d) other things equal, the quantity supplied for a good is inversely related to the price of a good.

A decrease in supply means: a) that more will be supplied at every price. b) that less will be demanded at every price. c) a movement down the supply curve as prices go down. d) a shift to the left of the entire supply curve.

In the market for tacos, each of the following shifts the supply curve to the left except: a) a decrease in the price of tacos. b) fewer taco shops. c) an increase in the price of beef. d) an increase in the wages of taco shop workers.

Which of the following is not a determinant of supply? a) the cost of production b) the technology of production c) consumer tastes d) expectations regarding future prices

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to ________ in ________ flat-panel televisions. a) an increase; the supply of b) a decrease; the supply of c) an increase; the demand for d) a decrease; the quantity supplied of

Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150 units. If the price of good Y is $12: a) the quantity supplied will be less than 150 units. b) there will be an excess demand for good Y. c) the quantity demanded will be greater than 150 units. Correct Response d) there will be an excess supply of good Y.

If the quantity supplied in a market exceeds the quantity demanded in a market, we would expect prices to: a) rise in order to clear the market. b) stay the same. c) rise. d) fall.

The market price of airline flights increased recently. Some economists suggest that the price increased because there has been an increase in the number of business travelers. They believe that in the market for flights: a) supply decreased. b) demand decreased. c) demand increased. d) supply increased.

If tortilla chips are a normal good, what happens to equilibrium price and quantity when there is an increase in income? a) Equilibrium price decreases and equilibrium quantity decreases. b) Equilibrium price increases and equilibrium quantity increases. c) Equilibrium price increases and equilibrium quantity decreases. d) Equilibrium price decreases and equilibrium quantity increases.

In the market for tacos, you observe that the equilibrium price and quantity have increased. This can be caused only by: a) fewer taco shops. b) an increase in the wages of taco shop workers. c) an increase in the incomes of people who eat tacos. d) an increase in the price of beef.

Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity sold of peanut butter as incomes fall during an economic recession? a) The price and quantity would both increase. b) The price would decrease and the quantity would increase. c) The price and quantity would both decrease. d) The price would increase and the quantity would decrease.