ECON week 2 HW
Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?
Equilibrium quantity increases
In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
The demand curve would shift leftward.
People eat at restaurants less often when their incomes fall because of a recession. Eating at restaurants must be
a normal good
In the above figure, the shift in the demand curve from D to D1 can be the result of
an increase in the price of a sub sandwich, a substitute for pizza.
Consider the market for smart phones. Which of the following shifts the demand curve rightward?
an increase in the price of land-line phone service, a substitute for smart phones
In the above figure, the movement from point a to point b reflects
an increase in the price of pizza
Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
an increase in the supply electric cars so that the supply curve shifts rightward
Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have
an inelastic demand
If income increases and the demand for bus rides decreases,
bus rides are an inferior good
If the price of a one good increases and the quantity demanded of a different good decreases, then these two goods are
complements
Patrick lives near two gas stations, Exxon and Shell. If Exxon decreases the price of gas, we predict that the quantity of gasoline demanded at Shell will
decrease because Exxon and Shell gas are substitutes.
Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.
decreases:falls
If good weather conditions result in a larger than normal crop of peaches, then the
equilibrium price of peaches falls, and the equilibrium quantity of peaches increases
Which figure above shows the effect if research is published claiming that eating pizza is healthy?
figure A
Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?
figure B
Which figure above shows the effect of a technological advance in the production of pizza?
figure D
If a higher price for wheat decreases the quantity of corn being produced, which of the following describes what has occurred?
he quantity of wheat supplied increased and the supply of corn decreased.
If both producers and consumers believe that a product's price will rise in the future, then at the present, demand ________ and supply ________.
increases: decreases
If a 30 percent price increase generates a 20 percent decrease in quantity demanded, then demand is
inelastic
Which of the following increases the supply of a product?
lower prices for the resources used to produce the product
If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.
rise: increase
The law of supply reflects the fact that
suppliers have an incentive to use their resources in the way that brings the biggest return.
In the above figure, an increase in cost of the cheese used to produce pizza
supply curve shifts from S to S1
If the automobile workers' union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles?
supply decreases
Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, ______ and in the market for hybrids ______.
supply increases and the price falls; demand increases and the price rises
Which of the following describes the law of demand? When other things remain the same, as
the price of gas falls, the quantity demanded of gas increases.
The price of cotton clothing falls. As a result,
the quantity demanded of cotton clothing increases.
The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.20, then
there's a gas shortage in Tulsa
If a 10 percent price increase generates a 10 percent decrease in quantity demanded, then demand is
unit elastic
You are just about to finish college and are about to start a high paying job. Because of this new job, what is the most likely outcome in the market for cars?
your demand for cars will increase
