EC 532 chapter 1-2 test 1

the number of buyers

Which of the following is not considered a factor that influences supply?

A change in the incomes of drivers.

Which of the following would not cause the supply curve for gasoline to shift?

the price of a good and the quantity consumers are willing and able to buy at each price level.

"Demand" is best defined as the relationship between

a decrease in the equilibrium price of gasoline.

All else constant, a large decrease in the number of people who want to own sport utility vehicles (SUVs) because of their poor fuel efficiency could be expected to cause:

decrease.

All else constant, as more firms substitute alternative materials, e.g., plastic, for copper, the market price of copper would be expected to:

quantity supplied

All of the following are non-price factors that influence demand except:

shift right.

An increase in the number of buyers in the market for LED TVs would cause the market demand curve for LED TVs to:

Equilibrium price and quantity would both decrease.

As the price of milk increases, what would reasonably be expected to happen to the equilibrium price and equilibrium quantity of cereal?

equilibrium price to increase and equilibrium quantity to decrease.

Assume declining profits in the market for Internet service force several firms in the area to drop out of the market. All else constant, this would cause the:

X and Y are substitutes

Assume the demand function for good X can be written as Qd = 80 - 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation:

increase; 6 units decrease; 3 units increase; 3 units decrease; 6 units

Assume the demand function for good X can be written as Qd = 80 - 3Px - 6Py + 10I, where Px = the price of X, Py is the price of Y I is consumer income. If the price of Y increases by 1 dollars, quantity demand of X would _______ by ____ .

True

Assume the demand function for good X can be written asQd = 80 - 3Px + 2Py + 10Iwhere Px = the price of X,Py = the price of good Y, andI = Consumer income.This equation implies that X and Y are substitutes.

P=1.2-0.08Q

Consider the following demand function for copper, Q = 10 - 50P + .3I + 1.5TC + .5E where I is income, TC is telecom index, and E is an expectation index. If I=100, TC=10, and E=10 which of the following would represent the demand equations?

substitute goods

DSL and broadband internet service would be considered an example of:

X & Z are complements, because there is a negative relationship between the price of good Z and demand for good X.

Exhibit 1 The demand curve for copper is given by QD = 500 - 5PX + 0.5I + 10PY - 2PZ Where QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z Based on the demand curve above (Exhibit 1), what is the relationship between good X and good Z? How can you tell?

Price intercept = $118; Quantity intercept = 590

Exhibit 1 The demand curve for copper is given by QD = 500 - 5PX + 0.5I + 10PY - 2PZ Where QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z For the above demand (Exhibit 1), determine the price and quantity intercepts, given consumer income is 20k, and prices of goods X and Y are both $10

P=8

The demand and supply functions for sweatshirts are as follows: Qd = 20,000 - 500P Qs = -8,000 + 3000P Solve for the equilibrium price

increase

Many people consider hot dogs to be an inferior good. For such people, all else held constant, a decrease in income would cause their demand for hot dogs to:

X and Y are substitutes in production.

Assume the supply function for good X can be written as Qs = -100 + 27Px - 5Py - 1.8W, where Px = the price of X, Py = the price of good Y, and W = Wage index for workers in industry X. According to this equation:

540

Exhibit 1 The demand curve for copper is given by QD = 500 - 5PX + 0.5I + 10PY - 2PZ Where QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z From exhibit 1, from the equation of the demand curve when consumer incomes are $20,000 (20 k), the price of good Y is $10, and the price of good Z is $10, what is the quantity demanded of good X, if the price of good X is $10?

Q=590-5P

Exhibit 1 The demand curve for copper is given by QD = 500 - 5PX + 0.5I + 10PY - 2PZ Where QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z From exhibit 1, what is the equation of the demand curve if consumer incomes are $20,000 (20 k), the price of good Y is $10, and the price of good Z is $10?

P=12

Given the supply equation for product X, QS = -240 + 20PX what is the minimum price at which the firm will supply any of good X at all?

Q=16,000

The demand and supply functions for sweatshirts are as follows: Qd = 20,000 - 500P Qs = -8,000 + 3000P Solve for the equilibrium Quantity

There will be a surplus of 24,500 units

The demand and supply functions for sweatshirts are as follows: lQd = 20,000 - 500P lQs = -8,000 + 3000P Now suppose that government impose a price floor of $15. What condition do you expect to prevail in the market?

Normal. Because demand for X and income coefficient are positively related

The demand curve for copper is given by QD = 500 - 5PX + 0.5I + 10PY - 2PZ Where QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z Based on the demand curve above (Exhibit 1), is X a normal or an inferior good? How can you tell?

TR=250Q-0.5Q^2

The demand curve is given by Q = 500 - 2P. What is the total revenue function?