$2.00 $1.50 Price (per gallon) $1.00 0 20 27 28 30 35 Millions of Gallons of Milk per Week There would be excess supply (a surplus) of milk whenever the price is A) between $1.5 and $2.00 per gallon. B) lower than $ 1.50 per gallon. () lower than $2.00 per gallon. D) higher than $1.50 per gallon. 11) Assume the demand function for good X can be written as Qd = 80 - 3PX + 2Py + 101, where Px = the price of X, By = the price of good Y, and I = Consumer income. According to this equation: A) arise in the price of Y would cause the demand for X to decrease. B) X and Y are substitutes. () X is an inferior good. D)X and Y are complements 12) Assume the demand function for good X can be written as Qd = 80 - 3PX + 2Py + 101, where Px = the price of X, by = the price of good Y, and I = Consumer income. According to this equation, all else constant, a one unit increase in the price of good Y would cause the quantity demanded of good X to: A ) decrease by 1 unit. B) decrease by 5 units. () decrease by 2 units. D) increase by 2 units. 13) All else constant, a large decrease in the number of people who want to own sport utility vehicles (SUVs) because of their poor fuel efficiency could be expected to cause: A ) a decrease in the equilibrium price of gasoline. B) an increase in the supply of gasoline. [) an increase in the supply of SUVs. >) an increase in the equilibrium price of SUVs. 14) Assume the supply function for good X can be written as Qs = -100 + 27Px - 5Py - 1.8W, where Px = the price of X, Py = the price of good Y, and W = Wage index for workers in industry X. According to this equation: A ) each one unit increase in price causes quantity supplied to increase by 73 units. B) X and Y are complements in production. C) X and Y are substitutes in production. D) a decrease in wages would cause a decrease in the quantity supplied at each price. 15) Assume there is a simultaneous decrease in the cost of batteries used in hybrid cars and a shift in consumer preferences toward more fuel-efficient vehicles such as hybrid cars. Based on this, we can conclude, with certainty, that in the market for hybrid cars, equilibrium: A ) quantity will decrease. B) quantity will increase. 3C) price will decrease. D) price will increase. 16) Assume The cosT of cerTain inpuTs used To produce arTificial ChrisTmas Trees increases and, aT The same Time, The economy moves inTo a recession, causing The incomes of consumers To decrease. Which of The following will happen To The equilibrium price and quanTiTy of arTificial ChrisTmas Trees? (Assume arTificial ChrisTmas Trees are normal goods.) A) QuanTiTy will decrease; price cannoT be deTermined. B) QuanTiTy will increase: price cannoT be deTermined. C) Price will decrease; quanTiTy cannoT be deTermined. D) Price will increase; quanTiTy cannoT be deTermined. 17) All else consTanT, all of The following would cause The demand curve for a good To shifT except: A) a change in consumer's incomes. B) a change in The price of a relaTed good. C) a change in The number of buyers. D) a change in The cosT of producing The good. Figure 2-4 Price 20.00 10.00 ~ , , ~ 0 200 400 500 600 7'00 800 Quantity 18) Refer to Figure 2-4. AT a price of $25, how many uniTs will be sold? A) 400 B) 500 C) 600 D) 800 Price $20 0 2 4 6 8 Quantity