Please circle the correct answer for the multiple choice questions that follow.

1.Which of the following events would shift the demand curve for gasoline to the right?

a.The income of gasoline buyers rises and gasoline is an inferior good.

b.The income of gasoline buyers falls and gasoline is a normal good.

c.There is an increase in the price of cars, a complementary good to gasoline.

d.Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars.

e.The price of gasoline rises.

f.The price of gasoline falls.

g.None of the above

2.Which of the following would cause the demand curve for an inferior good to shift to the left?

a.Decrease in income

b.Increase in price of a substitute good

c.Increase in price of a complementary good

3.Suppose that an increase in the price of good X results in fewer units of good Y being sold.This implies that X and Y are:

a.Giffen goods

b.Complementary goods

c.Normal goods

d.Inferior goods

e.Substitute goods

4.If we solve the producer and consumer problems at a given level of prices and the total quantity of good X that consumers want to consume is less than the total quantity of good X that producers want to produce, which of the following is true?

a.Price of X must increase

b.Price of X must decrease

c.Price of X must stay the same

5.When supply and demand both increase, equilibrium

a.Price will increase

b.Price will decrease

c.Quantity may increase, decrease, or stay the same

d.Price may increase, decrease, or stay the same

e.Price and quantity will increase