22. The law of demand implies that, all else equal, A) as the price of bagels ri

Question

22. The law of demand implies that, all else equal,
A) as the price of bagels rises, the demand for bagels will fall.
B) as the price of bagels rises, the quantity of bagels demanded will decrease.
C) as the price of bagels rises, the quantity of bagels demanded will increase.
D) as the demand for bagels rises, the price of bagels will increase.
E) None Of The Above

24.       Refer to Figure 1-4. Jim Osberg grows tobacco and millet on his land. A portion of his land is more             suitable for cultivating tobacco than millet and the other portion is more suitable for growing millet than tobacco. Which of the graphs in Figure 1-4 represents his production possibilities frontier?
            A) Graph A
            B) Graph B
            C) Neither graph A nor graph B represent his production possibilities frontier
            D) Either graph A or Graph B can represent his production possibilities frontier.

            E) None Of The Above

25.       After the tsunami in December 2004, which devastated lives and property in some Southeast Asian         countries, several non-profit organizations in the United States reported a decrease in charitable    contributions to aid programs in the United States. One commentator observed, "The milk of human        kindness is probably flowing at the usual rate in the United States. It's just getting channeled in    different directions." What economic principle does this observation demonstrate?
            A) trade-offs
            B) the principle of increasing marginal opportunity cost
            C) property rights
            D) the principle of constant marginal opportunity cost

            E) None Of The Above

26.       What is the difference between an "increase in demand" and an "increase in quantity demanded"?
            A) There is no difference between the two terms; they both refer to a shift of the demand curve.
            B) There is no difference between the two terms; they both refer to a movement upwards along a                             given demand curve.
            C) An "increase in demand" is represented by a rightward shift of the demand curve while an                       "increase in quantity demanded" is represented by a movement along a given demand curve.
            D) An "increase in demand" is represented by a movement along a given demand curve while an                               "increase in quantity demanded" is represented by a rightward shift of the demand curve.

27.       Which of the following is not a determinant of demand?
            A) Price of a substitute good
            B) tastes and preferences
            C) income
            D) expectations of suppliers

           E) None Of The Above

28.       If an increase in income leads to in an increase in the demand for single malt scotch, then single malt scotch is
            A) a neutral good.
            B) a necessity.
            C) a normal good.
            D) an inferior good.

33.       Several studies have shown promising links between green tea consumption and cancer prevention.        How does this affect the market for green tea?
            A) The demand for green tea curve shifts to the right because of a change in tastes and preferences              in favor of green tea.
            B) The supply of green tea curve shifts to the right because of a change in tastes and preferences in              favor of green tea.
            C) The demand for green tea curve shifts to the left because this new information will surely                          increase the price of green tea.
            D) The supply of green tea curve shifts to the right because this new information will surely                            increase the price of green tea.

34.       Technological advancements have resulted in lower prices for digital cameras. What is the impact of        this on the market for traditional photography?
            A) The demand curve for traditional photography shifts to the right.
            B) The demand curve for traditional photography shifts to the left.
            C) The supply curve for traditional photography shifts to the right.
            D) The supply curve for traditional photography shifts to the left.

            E) None Of The Above

35.       How does the increasing use of digital cameras affect the market for traditional camera film?
            A) The demand curve for camera film shifts to the left.
            B) The demand curve for camera film shifts to the right.
            C) The supply curve for camera film shifts to the left.
            D) The supply curve for camera film shifts to the right.

            E) None Of The Above

36.       Tom Searchinger, a senior attorney at the Environmental Defense fund, observed that generous farm subsidies have made it lucrative for farmers to produce more corn and more wheat. How does this impact the market for fertilizer?
            A) The supply of fertilizer increases.
            B) The supply of fertilizer decreases
            C) The demand for fertilizer increases.
            D) The demand for fertilizer decreases.

            E) None Of The Above

Explanation / Answer

22.Correct 24. I believe you are correct. Because there is a set trade off between the tobacco and millet. 25.I believe you to be correct 26. Correct 27. How does expectations of suppliers have any effect on quantity demanded? 28. Correct 33. Correct 34. Correct 35. I think the answer is A. Assuming digital cameras are favored to traditional cameras. If the demand curve for digital film shifts to the right then traditional film will shift to the left. This is assuming that these two cameras are substitutes. 36. I think that this will increase the demand for fertilizer because companies will require more of it, so they can produce more goods and benefit from the subsidy

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