1. A particular industry is witnessing an increase in the number of firms and a decrease in the number of consumers. Which of the following statements is correct?

aThe equilibrium quantity will definitely increase, but any change in the equilibrium price is uncertain.

bThe equilibrium quantity will defnitely decrease, and the equilibrium price will stay the same.

C The equilibrium quantity will definitely decrease, but any change in the equilibrium price is uncertain.

D The equilibrium quantity will defnitely increase, and thi quilibium price wil stay the same.

E None of the other answers listed is correct.

1. When a furniture store increased its selling price by 6%, the quantity demanded decreased by 4%.

The store's price elasticity of demand was

_... and the demand was

1. 0.67, inelastic
2. 0.67, elastic
3. 1.50, inelastic
4. 1.50, elastic

3. Assume the following in the market for coffee. A new study comes out showing that increased coffee consumption is associated with certain cancers. There is an expectation among consumers of a lower price. Firms that produce coffee are facing higher labor costs. Which of the following statements is correct?

1. The equilibrium quantity will definitely decrease.
2. The equilibrium price will definitely decrease.
3. the equilibrium price will definitely increase
4. The equilibrium quantity will definitely increase,

4. Assume the following in the market for new cars. There is an increase in income. Consumers expect a higher price for cars. Car manufacturers also expect higher prices. The costs of parts used in making cars increase. Based on all of the information, which of the following statements is correct?

1. The equilibrium price wil definitely increase, but any change in the equilibrium quantity is uncertain.
2. The equilibrium quantity will definitely decrease, but any change in the equilibrium price is uncertain.
3. The equilibrium price will definitely decrease, but any change in the equilibrium price is uncertain.
4. The equilibrium quantity will definitely increase, but any change in the equilibrium price is uncertain