I. Multiple Choice (1 point each) 1. The law of demand says that the higher the price of a good, other things constant: . a) The lower the demand for that good (B) The higher the demand for that good d) The lower the quantity demanded of that good The lower the lower the quantity demanded of a complement 2. A decrease in the price of laptop computers due to lower costs of producing and installing microchips is best represented by which of the following: a) A leftward shift in the supply curve for laptops and a movement up the demand curve b) A rightward shift in the supply curve for laptops and a movement down the demand curve C) A rightward shift in the demand curve for laptops and a movement up the supply curve d) A leftward shift in the demand curve and a movement down the supply curve 3. Which of the following would not shift the demand curve for bacon? : a) An increase in the price of eggs (assuming eggs and bacons are complementary goods) b) An increase in the price of bacon c) More commuter traffic going to fast food restaurants offering bacon and egg breakfast sandwiches. d) A finding that the consumption of bacon increases the risk of heart attack 4. Suppose that in a free market equilibrium 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation. Without the heart, each patient will die. The government decides this price is too high and imposes a maximum price of $200,000. Everything else equal, which of the following is true? A. More patients will now die B. There is a greater incentive to produce artificial hearts C. There will be a shortage of artificial hearts a) A and B b) A and C C) B and C d) A, B, and C