1. Suppose the price of Coke increases. What would happen to the equilibrium pri
ID: 1196107 • Letter: 1
Question
1. Suppose the price of Coke increases. What would happen to the equilibrium price and quantity of Pepsi?
a. Both the equilibrium price and quantity of Pepsi would increase.
b. Both the equilibrium price and quantity of Pepsi would decrease.
c. The equilibrium price of Pepsi increases, and the equilibrium quantity of Pepsi decreases.
d. The equilibrium price of Pepsi decreases, and the equilibrium quantity of Pepsi increases.
2. Which of the following most appropriately illustrates the law of supply?
a. Corporation XYZ has access to more labor resources so it increases production.
b. Because Sparrow Cable is the town's only cable company, charges a high price for its services.
c. As the price of hamburgers rises, Joe's Burgers is willing to sell more hamburgers.
d. As the price of automobiles increases, people are willing to buy fewer automobiles.
3. A decrease in the price of pizza will:
a. decrease the quantity of pizza demanded.
b. increase the quantity of pizza demanded.
c. decrease the demand for pizza.
d. increase the demand for pizza.
4. The law of demand:
a. applies to final consumer goods but not to productive resources purchased by business firms.
b. tells us how much of a good people want, but not necessarily how much of that good they are willing to pay for.
c. tells us that when the price of a good falls, quantity demanded will increase.
d. applies only to goods that are not absolute necessities.
5. When income increases, purchases of homes increase. This implies:
a. the demand curve for housing has shifted rightward.
b. there has been a movement down the demand curve for housing.
c. the demand curve for housing has shifted leftward.
d. there has been a movement up the demand curve for housing.
6. If VCRs and rental videos are complementary goods, a decrease in the price of VCRs would:
a. decrease the demand for VCRs.
b. decrease the demand for rental videos. >
c. increase the demand for VCRs.
d. increase the demand for rental videos.
7. Other things being equal, which of the following would NOT shift the supply for gasoline?
a. a fall in the price of crude oil (from which gasoline is refined)
b. an increase in the price of gasoline.
c. an improvement in refining techniques that allows more gasoline to be squeezed out of a barrel of crude oil
d. an increase in the wages paid to people working in oil refineries
8. Suppose there is an advance in technology that allows the automobile industry to manufacture automobiles more cheaply. We would expect:
a. an increase in both the equilibrium price and the equilibrium quantity of automobiles.
b. an decrease in both the equilibrium price and the equilibrium quantity of automobiles.
c. an increase in the equilibrium price and a decrease in equilibrium quantity of automobiles.
d. a decrease in the equilibrium price and an increase in the equilibrium quantity of automobiles.
9. Suppose the price of land increases. At the same time, income increases. What would happen to the equilibrium price and quantity of housing?
a. Equilibrium price will decrease. We cannot predict what will happen to equilibrium quantity.
b. Equilibrium price will increase. We cannot predict what will happen to equilibrium quantity.
c. Equilibrium quantity will decrease. We cannot predict what will happen to equilibrium price.
d. Equilibrium quantity will increase. We cannot predict what will happen to equilibrium price of housing (buildings and land together).
10. In the graph below, if the market is competitive and the current price is $50:
a. the price will rise.
b. the price will fall.
c. the price of $50 will stabilize.
d. the equilibrium price will rise to $60.
Explanation / Answer
1.Suppose the price of Coke increases. What would happen to the equilibrium price and quantity of Pepsi?
the equilibrium quantity of Pepsi increases.
2. Which of the following most appropriately illustrates the law of supply As the price of hamburgers rises, Joe's Burgers is willing to sell more hamburgers. The law of supply states that as price increases the firm will try to increase the supply in the market and vice versa.
3. A decrease in the price of pizza will increase the demand for pizza. As per the law of demand a fall in the price will lead to increase in the demand.
4. The law of demand: c. tells us that when the price of a good falls, quantity demanded will increase. Other things remaining constant the law of demand states inverse relationship between price and quantity demanded.
5. When income increases, purchases of homes increase. This implies:a. the demand curve for housing has shifted rightward. Increase in income will shift the demand for home to the right so that price of home remaining constant, the demand for homes will go up.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.