1. Suppose chocolate bars and marshmellows are compliments for each other. If the price of marshmellows decreases, then the new competitive equilibrium for chocolate bars occurs where
a) the original supply curve intercepts a new demand curve
b) the original demand curve intercepts a new supply curve
c) the original supply curve intercepts the original demand curve
d) none of the above
2. The elimination of mad cow disease in the country's cattle herds would likely
a) decrease the demand for beef and increase the demand for chicken
b) decrease quantity demanded for both beef and chicken
c) increase the demand for beef
d) decrease demand for beef and increase quantity demanded for chicken.
3. suppose that in the market for an agricultural commodity such as corn, there is a large increase in the quantity treaded. However, the price remains almost the same. The most likely explanation for this phenomenon is that
a) supply has increased but demand has remained constant
b) supply has decreased but demand has increased
c) both supply and demand have increased.
d) supply has increased and demand has decreased.
4. Peanut butter and jelly are used together to make sandwiches. If the price of peanut butter decreases, what changes will occur in the market for jelly?
a) the supply curve for jelly shifts inward
b) the demand curve for jelly shifts outward
c) the demand curve for jelly shifts inward.
d) the supply curve for jelly shifts outward.
5.which of the following would cause an increase in the supply?
a) improved technology
b) lower labor productivity
c) decreased price of substitutes
d) decreased demand
6. for most good or services, quantity demanded decreases if supply increase
c) both a & b
d) neither a or b
7. if equilibrium price and quantity both fall the cause is
a) an increase in demand and a decrease in supply
b) a decrease in both supply and demand
c) an increase in demand without a change in supply
d) a decrease in demand and an increase in supply
8. an increase in the income of a consumer will cause his/her demand for a normal good to increase. How will an decrease in income affect the equilibrium price and quantity?
a) both quantity and price increase
b) quantity increases but price decreases
c) quantity decreases but price increases.
d) both quantity and price decreases.