At any price lower than the equilibrium price, a ___________ in quantity will be created and at any price higher than the equilibrium price, a _____________ in quantity will be created.

a.shortage; surplus

b.surplus; surplus

c.shortage; shortage

d.surplus; shortage

If Goods X and Y are complements, if the price of Good X decreases, this will cause a _________ the demand curve forGood Yand a ________the demand curve forGood X.

a.shift in; movement along

b.movement along; shift in

c.shift in; shift in

d.movement along; movement along

If the demand function for Good X is QD= 800 - 2PX- 3PY- 0.01M and PY= $50, M = $50,000, PX= $55, Goods X and Y are complements.

True / False?

If the demand function for Good X is QD= 800 - 2PX- 3PY- 0.01M, and PY= $50, M = $50,000, and PX= $55, Good X is an inferior good.

True / False?

If the cross-price elasticity between Goods X and Y is 2.5, if the price of Good Y increases by 5%, by what percent will the demand for Good X change?

Answer = [ ]