1.Following an increase in supply and an increase in demand, the market is producing more at a lower price. What must have happened?

a.The change in demand was larger than the change in supply.

b.The change in demand was smaller than the change in supply.

c.There is no reason to think that either change was larger than the other.

d.Some other change must have occurred.

2.Suppose the price of wheat decreases. Wheat is a substitute for soybeans for consumers and producers. What will happen to the price of soybeans?

a.increase

b.decrease

c.not change

d.One cannot tell.

3.Suppose that an increase in income occurs at the same time the cost of producing an inferior good decreases. What will most likely happen to the price of the good?

a.increase

b.decrease

c.not change

d.One cannot tell.

4.The same changes as in the previous question will cause which of the following change in prices of textbooks?

a.an increase

b.a decrease

c.no change

d.one cannot tell

5.If producers, but not consumers, begin to expect prices of the good they produce to increase in the near future, what will happen to the market price now?

a.it will increase

b.it will decrease

c.it will not change now

d.one cannot tell

6.Which of the following will shift the supply for a good to the left?

a.An increase in the price of an input used to produce the good.

b.An increase in the price of the good.

c.An improvement in the technology used to produce the good.

d.An anticipation of future price decreases for the good.

7.The table above represents the weekly market for gyros. The market equilibrium price and quantity are:

a.$2.75 per gyro and 625 gyros.

b.$3.00 per gyro and 620 gyros.

c.$3.00 per gyro and 310 gyros.

d.$3.25 per gyro and 308 gyros.

8.The table above represents the market for flash drives. A new technology is developed that allows producers to produce 60 more flash drives at each price. The new market equilibrium price and quantity will be:

a.$3.25 per flash drive and 1440 flash drives.

b.$3.50 per flash drive and 1410 flash drives.

c.$3.75 per flash drive and 1410 flash drives.

d.$4.00 per flash drive and 1350 flash drives.