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.;NormalInferiorNeither;normal nor inferiorGiffen;2.All of the following can lead to an increase in the demand for ice cream;a normal good, EXCEPT;An;increase in incomeA;decrease in incomeAn;increase in the price of popsiclesA new;scientific study that finds eating ice cream does not cause weight gain;3.A decrease in supply will lead to;An;increase in priceA;increase in quantityAn;increase in demandAn;increase in sales;4.Generally, with all else held constant, when the price of a good;increases, consumers purchase;More of;the goodLess of the;goodThe same;amount of the goodNone of;the good;5.An increase in demand will lead to;An;increase in supplyA fall in;quantityAn;increase in priceA;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 flyA fall in;the price of oilAn;increase in the price of ground transportationA;decrease in income levels;7.Which of the following will cause a rightward shift of the market supply;curve?;An;increase in the product priceA;decrease in input costsChange in;consumers? tastesAn;increase in income;8.Substitutes are goods that people buy;More of;when their incomes increaseLess of;when their incomes increaseInstead;of another product whose price has increasedTo 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 pastThe price;of Pepsi increasedPepsi;consumers had an increase in income;11.Assume your demand for gingerale remains constant, but the price of;gingerale increases. Your consumer surplus;DecreasesIncreasesRemains;constantMay;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 hamburgersA;decrease in quantity supplied of hamburgersA;decrease in the supply of hamburgersAn;increase in the demand for hamburgers;13. Suppose you are;given the following equations for demand and supply of copper in the US.;Demand: Qd = 500 - 3P;Supply: Qs = 2P;where P = price, Qd = quantity demanded;and Qs = quantity supplied.;Find the no trade equilibrium.;14. Suppose the world;price is set at $80 and we have free trade. Using the equations in;question 13 (also reproduced below), find what the domestic producers would;produce at this price and what the domestic consumers would consume.;Would the US export of import copper as a result? How much?;Qd = 500 - 3P;Qs = 2P;15.On the basis of what you have found in questions 13 and 14, do you think;there would be gains from trade? Will the consumer surplus increase or decrease;as a result of trade? Will producer surplus increase or decrease? What about;the sum of CS and PS? (Hint: draw a graph for yourself, as in the practice;questions for quiz 1. You DO NOT need to reproduce the graph here).
Paper#55397 | Written in 18-Jul-2015Price : $32