micro ch 1 and 2
An increase in the demand for GM automobiles results in an increase in the quantity supplied of GM automobiles.
true
At the beginning of the fall semester, college towns experience large increases in their popu- lations, causing an increase in the demand for apartments.
true
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag said they were $29.99. Therefore Gertie should buy the jeans because the price is less than her reservation price.
true
If pencils and paper are complements for most consumers, then if the price of paper increases, you would expect the equilibrium price and quantity of pencils to fall.
true
If supply and demand both decrease, then the new equilibrium quantity will be lower, but the direction of the price change is uncertain.
true
In a market in which the government has set a price ceiling below the equilibrium price a black market might develop.
true
Jessica's marginal cost for producing a pitcher of lemonade is $0.25. Therefore, $0.25 is her reservation price.
true
One reason the demand curve slopes downward is that as prices fall more people find that the price is now less than their reservation price.
true
Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price.
true
Suppose sport utility vehicles get poor gas mileage compared to other available cars. If the price of gasoline increases, then one would then expect the demand for sport utility vehicles to decrease.
true
Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. This is most consistent with an increase in the cost of producing coffee.
true
"As the price of personal computers continues to fall, demand increases." This headline is inaccurate because the statement is backwards: increased demand leads to lower prices.
false
An increase in both the equilibrium price and the equilibrium quantity of DVD players is best explained by a decrease in demand for DVD players.
false
As the price of cookies increases, firms that produce cookies will increase the supply of cookies.
false
Equilibrium price is fair in the sense that everyone can afford basic goods and services.
false
If fast food is an inferior good then the quantity of fast food demanded will fall as income rises.
false
If the equilibrium price for a gallon of gasoline is $30, then a price ceiling at $28 would have no effect in this market.
false
Shelly purchases a leather purse for $400. One can infer that her reservation price was exactly $400.
false
Suppose one knows two facts: first, the market for prescription drugs experiences chronic shortages and second, the government sets the price for prescription drugs. One can conclude that the government has encouraged buyers to hoard prescription drugs.
false
Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. This is most consistent with a decrease in consumer income assuming coffee is a normal good.
false
The entire group of buyers and sellers of a particular good or service makes up the equilibrium price and quantity.
false
You can spend $10 for lunch and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger. This is best described as a decrease in buyer's reservation price.
false
You have noticed that there is a persistent shortage of teachers in an inner-city school district in your state. Based on this observation, you suspect that the demand for teachers in inner- city school district is too high.
true