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1. Other things being equal, the law of demand suggests that as: A. The demand for 3-D TVs increases, the price will decrease B. Income increases, the quantity of 3-D TVs demanded will increase *C. The price of 3-D TVs decreases, the quantity demanded will increase D. The price of 3-D TVs decreases, the quantity demanded will decrease 2. A news story states that "CDs lose their appeal as consumers switch to iPods for music." In a competitive market for CDs, this situation would lead to a(n): A. Increase in the price and the quantity sold of CDs *B. Decrease in the price and the quantity sold of CDs C. Increase in the price and a decrease in the quantity sold of CDs D. Decrease in the price and an increase in the quantity sold of CDs 3. As a result of a fall in the price of gasoline, consumers can afford to take more driving trips. This is an illustration of: *A. The income effect B. The substitution effect C. Diminishing marginal utility D. The rationing function of prices 4. If the market price is above the equilibrium price:4.... View Full Document

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