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Other 1. 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: A. A shortage will occur and producers will produce more and lower prices *B. A surplus will occur and producers will produce less and lower prices C. A surplus will result and consumers will bid prices up D. Producers will make extremely high profits 5. Which statement best illustrates the concept of diminishing marginal utility? A. If the price of hamburger declines, there will be a change in consumer tastes in favor of hamburger B. A typical consumer will less receive satisfaction from consuming hamburgers than from consuming pork *C. A typical consumer will receive less satisfaction from consuming the fourth hamburger per week than the third hamburger per week D. A decrease in the price of hamburger will cause consumers to buy more hamburger because they have, in effect, received an increase in income 6. Which is a determinant of the demand for housing? A. The price of lumber B. Wages for electricians C. The price of housing *D. Changes in the expected future price of housing 7. Refer to the above graph with three demand curves. An increase in quantity demanded would be illustrated by a change from: A. Point 4 to point 6 B. Point 2 to point 1 *C. Point 4 to point 1 D. Point 2 to point 5 8. Refer to the above graph with three demand curves. A decrease in demand would be illustrated as a change from: A. Point 1 to point 4 B. Point 1 to point 3 C. Line C to B *D. Line A to C 9. Which of the following will not cause the supply curve to shift? A. A change in the costs of resources needed to produce the good B. A technological change in the production of the good *C. A change in the price of the good D. A change in the prices of other goods that could be produced 10. Which would cause a rightward shift in the supply curve for telephone service? *A. A decrease in the wages of telephone workers B. An increase in the price of telephones C. An increase in the taxes paid by telephone companies D. A decrease in a subsidy given to telephone companies ... View Full Document

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