1. The price of microchips used to produce iPad rises. As a result, the equilibrium price of iPads ________, and the equilibrium quantity ________.

a. falls; decreases

b. rises; decreases

c. rises; increases

d. falls; increases

2. What factor will lower the price of bacon?

a. a shift to the right of the demand curve for bacon

b. a decrease in the number of bacon buyers

c. a decrease in the number of bacon suppliers

d. a shift to the right of the supply curve for bacon

3. If the value of homes in Seattle increases, and as a result, the people of Seattle spend more, incomes in Seattle will:

a. be unaffected

b. increase

c. increase and decrease by the same amount, leaving overall income unchanged

d. decrease