Quiz1Answers - demanded but not the quantity supplied. Is...

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Economics 20A Winter 2008 Answers to Quiz 1 1. (10 points) Good A is a substitute for good B. How does a decrease in the supply of good A affect demand for good B? ANSWER: A decrease in the supply of good A increases the market price of good A. Since the two goods are substitutes, demand for good B increases. 2. (10 points) “An increase in the demand for notebooks raises the quantity of notebooks
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Unformatted text preview: demanded but not the quantity supplied. Is this statement true or false? ANSWER: The statement is, in general, false. The increase in demand for notebooks causes an increase in price. The increased price in turn increases the quantity supplied. The only way the statement would be true is if the supply curve was a vertical line...
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This note was uploaded on 02/02/2009 for the course ECON 62140 taught by Professor Ouyang during the Spring '08 term at UC Irvine.

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