Econ Post Test

If the number of consumers in the market for good A increases, what will happen to the equilibrium price and quantity of good A?

Equilibrium price and quantity will both increase

When the price of good A rises, people start to drink good B. In this case.

Good B is a substitute good.

An improvement in technology used by producers of a certain good will result in:

an increase in the supply of the good

If the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and a decrease in the equilibrium quantity.

False

If consumers expect higher coffee prices in the future:

The demand for coffee will increase now.

If good A is considered to be an inferior good, when incomes rise:

The demand for good A will decrease and the demand curve will shift to the left.

If the price of peanut butter were to increase, what would likely happen to the demand for jelly?

The demand for jelly would decrease—the demand curve would shift left

If two goods are complements, an increase in the price of one good will cause a decrease in the demand for the other.

True

An increase in the average income of consumers will result in:

An increase in the demand for goods and services

An increase in the price of a good would be illustrated on a demand graph as a:

Movement along the demand curve upward.

According to the law of demand, as a price of a good or service increases, the

Quantity demanded of the good or service will decrease.

According to the law of supply, if the price of a good or service increases:

Quantity supplied will increase.

A government-imposed price floor, above equilibrium price, in the market for a good or service will result in:

A surplus of the good or service

If a good is considered "normal" by economists, an increase in consumers' incomes will result in a decrease in the demand for the good.

False

If producers expect the price of a good to rise, what will happen to the good's equilibrium price and quantity?

Equilibrium price will increase and equilibrium quantity will decrease

If the government imposes a tax on the production of a good or service, what will happen to the equilibrium price and quantity of the good

Equilibrium price will increase and equilibrium quantity will decrease

A decrease in the price of a good would be illustrated on a supply graph as a:

Movement along the supply curve downward.

If the price of one of the resources used to produce a good decreases:

The supply curve for that good would shift right.