Question 1

An increase in supply and a decrease in demand will:

a.ncrease price and one cannot tell about quantity.

b.decrease price and one cannot tell about quantity.

c.increase quantity and one cannot tell about price.

d.decrease quantity and one cannot tell about price.

e.Some other combination of price and quantity changes is accurate.

Question 2

Suppose that an increase in income occurs at the same time the cost of producing an inferior good decreases. What will most likely happen to the quantity of the good?

a.increase

b.decrease

c.not change

d.One cannot tell.

Question 3

What will happen to the price and quantity of vacation-area hotel rooms in California if the cost of jet fuel rises? Most of the tourists come from Tennessee. The price will______________; the quantity will______________.

a.increase; decrease

b.decrease; increase

c.increase; increase

d.decrease; decrease

Question 4

An increase in income at the same time as an increase in costs of producing an inferior good will most likely______________the price of the good.

a.increase

b.decrease

c.not change

d.One cannot tell.

Question 5

A new manufacturing process makes bicycles cheaper to produce. You would expect:

a.the demand for bicycle helmets to increase because bicycles and bicycle helmets are complements.

b.the quantity demanded of bicycle helmets to decrease as the price of bicycle helmets would increase.

c.the supply of bicycle helmets to increase due to the higher price of bicycle helmets.

d.the demand for bicycle helmets to decrease because the price of bicycles is likely to decrease.

Question 6

Which of the following would not shift the supply for a good?

a.An increase in the price of an input used to produce the good.

b.An increase in the price of the good.

c.An improvement in the technology used to produce the good.

d.An anticipation of future price increases for the good.

Question 7

The table above represents the market for bowling balls. The market equilibrium price and quantity are:

a.$60.00 per bowling ball and 40 bowling balls.

b.$65.00 per bowling ball and 38 bowling balls.

c.$70.00 per bowling ball and 39 bowling balls.

d.$75.00 per bowling ball and 74 bowling balls.

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