Econ Exam
If baseball bats and toothpicks are substitutes in production, a producer (with her fixed set of resources) will need to reduce the production of baseball bats when she:
produces more of the other good.
A technological improvement has been developed in the production of mangos. At the same time, scientists have discovered that mangos have significant health benefits. This will result in:
an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of mangos.
Suppose the New York City housing market is in equilibrium. A recession causes local household incomes to decline. At the same time, construction of a series of new apartment buildings has just been completed. Given these two changes, and assuming that apartment housing is a normal good, we can predict that the price of apartments will _____, and the quantity of apartments bought and sold will _____.
fall; rise or fall
An increase in the price of strawberries causes strawberry jam producers and consumers to expect that the price of strawberry jam will rise in the future. In the market for strawberry jam, both the equilibrium price and the equilibrium quantity increase. It must be the case that:
the demand for strawberry jam increased by more than the supply of strawberry jam decreased.
Quantity controls have no undesirable side effects.
true
The difference between the demand price and the supply price at the quota limit is consumer surplus.
true
