Microeconomics Unit 2 prep

The relationship between quantity supplied and price is ________ and the relationship between quantity demanded and price is _____.

A. Direct, inverse

B. Inverse, direct

C. Inverse, inverse

D. Direct, Direct

A. Direct, inverse

An increase in the price of a product will reduce the quantity demanded for that product because

Consumers will substitute other products for the one whose price has risen

Which of the following will NOT cause the demand for video games to change

A change in the price of video games

An economist for a computer company predicts that a rise in consumer incomes will increase the demand for computers. This prediction assumes that

Computers are normal goods

Which of the following statements is correct

An increase in the price of X will decrease the demand for complementary product Y

A leftward shift of a supply curve for avocados (a normal good) might be caused by

Some avocado farmers leaving the market

Assuming Ramen noodles are an inferior good, a decrease in income will shift the

Demand curve for ramen noodles to the right

Which of the following events will cause the demand curve for hamburgers to shift to the right

An increase in the price of pizza, a substitute for hamburgers

Refer to figure A. At price $20, which of the following would occur

Shortage of 100

Refer to figure A. What would be the effect of a price floor at $60

A surplus of 100

If the cost of producing automobiles increases, the price, equilibrium quantity and consumer surplus will most likely change in which of the following ways?

Increase, Decrease, Decrease

Other things equal, if the price of a key resource used to produce product X falls, the:

Product supply curve of X will shift to the right

Which of the following statements is correct?

If supply increases and demand increases, equilibrium price will fall.

If buyer's max = $300, Seller's max = $150, and Price = $350 then:

There would be no exchange

Assume that consumers consider tea and coffee to be substitutes. A significant increase in the supply of tea will affect the coffee market by

Decreasing the demand for coffee and therefore the price of coffee

Following a severe drought, the price of bottled water normally increases significantly. If cities had passed laws prohibiting price increases for bottled water, during severe droughts such laws would most likely

Create a shortage of bottled water

Which of the following would most likely result in an increase in the equilibrium price of avocados, a normal good?

New studies suggest that avocados contain traces of cancer-fighting substances

Promoters of a traveling circus know that if they charged $5 a ticket, 200 people would buy tickets for the circus, and if they charged $2 a ticket, 500 people would buy tickets. Over this price range, the demand for the tickets

Unit Elastic

Assume that people like sauerkraut with their bratwurst. If the supply of bratwurst increases, the demand for sauerkraut will most likely

increase because bratwurst and sauerkraut are compliments

A decrease in the effective minimum wage will have less of an impact on employment if the demand loss for labor is?

relatively inelastic

Considering chimichangas, delicious deep-fried burritos, which of the following best describes the law of demand?

when the price of chimichangas decreases, the quantity of chimichangas demand increases

which of the following will cause the supply curve for donuts to shift to the right?

An increase in the number of firms producing donuts

citing the epidemic of obesity and type 2 diabetes in america, congress approves a new tax on producers of high fructose corn syrup, one of the key ingredients in soda pop. The price paid by consumers and the quantity of soda pops sold will most likely change which of the following ways?

Increase and decrease

Which of the following will tend to make the demand for suspenders more elastic?

New firms which produce similar products (such as belts) enter the industry

assume the demand for a product is relatively inelastic, and the supply is relatively elastic. A per unit excise tax will cause

consumers to pay a larger portion of the tax burden.