1 a. Quantity must increase but market price may fall: stay the same or even increase. b. Price must fall but market quantity may fall: stay the same or even increase. c. Price must increase but market quantity may fall, stay the same or even increase. :1 Quantity must decrease but market price may fall, stay the same or even increase. e. Bath market quantity and market price must increase. f. Market quantity must increase: and market price must decrease. 2- Price D2 (211311\")? 3. 3.2 60.0 111.0 118.0 130.0 150.0 (aclosebutapproximate) 4 a. demand has increased b. demand has decreased c. supply has increased :1 supply has decreased e. quantity supplied has decreased. f. quantity demanded has decreased. g. quantity demanded has increased. h. quantity supplied has increased. 5. Circle the correct formula for marginal revenue (MIR) a. MR=2.4Q b. MR=3.5u e. MR=1.16?Q c. MR=1.5.2Q d. MR=1.333Q f. MR=1.5.333Q 6. 3 4.5 6 7.5 7 a. 2 percent and total expenditures on bread will rise. b. 2 percent and total expenditures on bread will fall. c. 20 percent and total expenditures on bread will rise. d. 20 percent and total expenditures on bread will fall. e. 20 percent and total expenditures on bread will be unchanged. 8 a. negative and therefore these goods are inferior goods. b. negative and therefore these goods are complements. c. positive and therefore these goods are substitutes. d. positive and therefore these goods are normal goods. 9. 0.39 0.5 .89 1.0 1.75 2.83 10. 2.5% 8% 10% 15% 25% 40% 11. -3.67 -1.22 1.22 1.44 3.67 4.331. If supply increases and demand is unchanged, we can conclude that the new equilibrium: 2. On the diagram for question two, circle the letter that correctly completes the following statement: Let Di and So represent the original supply and demand curves. If there has been an increase in demand, and a decrease in supply, then the new equilibrium point is ? 3. One of the following equations represents a supply curve and the other a demand curve. You have to decide which is which. Circle the answer for question three that is the closest to being correct. The equations are: Q =150-10P Q =100+5.6P What quantity will demanders want if market price is forced to be $2? 4. Here is a function that is either a demand function or a supply function (but not both): Q=6-5P A change occurs so that the following function now represents the situation: Q=12 -5P We can conclude that (circle the appropriate conclusion on the answer sheet). 5. Here is a demand function: . Q=9 -OF On the answer sheet circle your choice for its marginal revenue (MR.) function. 6. Circle your choice for the quantity that will maximize total revenue for the function in 5 (above). 7. Suppose the price elasticity of demand for bread is 1.00. If the price of bread rises by 20%, the quantity demanded will decrease by: 8. Suppose that a 10% decrease in income causes a 20% increase in demand for good X. The coefficient of income elasticity of demand is: 9. When the price of a weekly magazine decreases from $2.00 to $1.50 the quantity demanded increases from 90,000 to 150,000. The price elasticity of demand in this range is: 10. If the elasticity of supply of crude oil is 1.5, how much will production have to increase to match a 10% price increase? 11. Demand for X decreases from 100 to 50 when the price of Y decreases from $6 to $5. The cross-price elasticity of demand is