1

All else equal, if the price of a good increases, its

a) Supply decreases

b) Demand decreases

c) Supply increases

d) Quantity supplied decreases

e) Quantity demanded decreases

2

Which of the following will shift the demand curve for a good?

a) A change in the technology used in producing the good

b) A change in the cost of materials used to make the good

c) A change in the price of the good

d) A change in per unit taxes on sellers

e) None of these answers

3

Wood is an important material in the production of housing. What would happen to the equilibrium price and quantity of houses if wood prices drastically increased?

a) Prices will increase, Quantity will decrease

b) Prices will increase, Quantity will increase

c) Prices will decrease, Quantity will increase

d) Prices will decrease, Quantity will decrease

4

Suppose the streaming of Music and Movies are substitutes. Which of the following would occur in the market for Movie streaming if Music streaming prices decreased?

a) Price would increase, quantity would decrease

b) Price would increase, quantity would increase

c) Price would decrease, quantity would decrease

d) Price would decrease, quantity would increase

5

Suppose prices for new homes have decreased and sales of new homes have increased. Which of the following could cause this?

a) Construction costs have decreased

b) Consumer incomes have increased

c) Land used for housing developments has increased in cost

d) The demand for new homes has decreased

6

Suppose coffee and creamer are complements. If the price of coffee decreases, what happens to the equilibrium price and quantity of creamer?

a) Price increases, quantity increases

b) Price increases, quantity decreases

c) Price decreases, quantity increases

d) Price decreases, quantity decreases

7

Suppose the government increases taxes on sales of milk. This will lead to

a) A decrease in demand

b) An increase in supply

c) A decrease in quantity demanded

d) An increase in demand

8

Suppose consumer incomes decrease. In the market for a normal good, at the original equilibrium price this would create

a) An increase in production

b) A decrease in production

c) Excess demand

d) Excess supply

9

Tim, Cindy, Fred, and Joe are shopping at Walmart for sweatpants. The most each is willing to pay is $10, $13, $7, and $22. If the actual price of sweatpants is $12, how much consumer surplus is created?

a) Consumer Surplus = $35

b) Consumer Surplus = $11

c) Consumer Surplus = $7

d) Consumer Surplus = $17

10

Suppose a market has the following points on its demand curve:

Price	70	65	60	55	50	45	40
Quantity Demanded	0	10	20	30	40	50	60

Assuming the price is $50, how much consumer surplus exists in this market?

a) Consumer Surplus = 50

b) Consumer Surplus = 400

c) Consumer Surplus = 1000

d) Consumer Surplus = 500