03 Jun 1. If a consumer’s income doubles and she now purchases
Question
1. If a consumer’s income doubles and she now purchases more of good X, we can infer that good X is a(n) _______________ good.
Normal
Inferior
Neither normal nor inferior
Giffen
2.All of the following can lead to an increase in the demand for ice cream, a normal good, EXCEPT:
An increase in income
A decrease in income
An increase in the price of popsicles
A new scientific study that finds eating ice cream does not cause weight gain
3.A decrease in supply will lead to:
An increase in price
A increase in quantity
An increase in demand
An increase in sales
4.Generally, with all else held constant, when the price of a good increases, consumers purchase:
More of the good
Less of the good
The same amount of the good
None of the good
5.An increase in demand will lead to:
An increase in supply
A fall in quantity
An increase in price
A decrease in producer surplus
6.Which of the following events would lead to an increase in demand for air travel?
An increase in the number of people who are afraid to fly
A fall in the price of oil
An increase in the price of ground transportation
A decrease in income levels
7.Which of the following will cause a rightward shift of the market supply curve?
An increase in the product price
A decrease in input costs
Change in consumers’ tastes
An increase in income
8.Substitutes are goods that people buy
More of when their incomes increase
Less of when their incomes increase
Instead of another product whose price has increased
To use with another product
9.Which of the following is consistent with the law of supply?
As the price of calculators rises, the supply of calculators increases, ceteris paribus.
As the price of calculators falls, the supply of calculators increases, ceteris paribus.
As the price of calculators rises, the quantity supplied of calculators increases, ceteris paribus.
As the price of calculators rises, the quantity supplied of calculators decreases, ceteris paribus.
10.The quantity demanded of Pepsi has decreased. The best explanation for this is that
The price of Coca-Cola has increased.
Pepsi’s advertising is not as effective as in the past
The price of Pepsi increased
Pepsi consumers had an increase in income
11.Assume your demand for gingerale remains constant, but the price of gingerale increases. Your consumer surplus
Decreases
Increases
Remains constant
May increase or decrease depending on the amount of the price decrease
12.Assume hamburgers and french fries are complements. A decrease in the price of french fries will cause
An increase in quantity demanded for hamburgers
A decrease in quantity supplied of hamburgers
A decrease in the supply of hamburgers
An increase in the demand for hamburgers
13. Suppose you are given the following equations for demand and supply of copper in the US.
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