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Q2S08

# Q2S08 - Name Test Form A Economics 1 Quiz 2 May 7 2008 Each...

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2 6. This year natural gas prices increased sharply in California. Also, more natural gas was sold in the state than in previous years. This suggests that: (a) the theory of supply and demand does not apply to necessities like natural gas, since if it did, demand would decrease when the price goes up. (b) the supply curve for natural gas is vertical. (c) the demand curve for natural gas has shifted up and the supply curve for natural gas is upward sloping. (d) the supply curve for natural gas has shifted to the right. (e) the supply curve for natural gas has shifted to the left. 7. Suppose that an oil cartel succeeded in reducing the supply of crude oil by 5% and suppose that the price elasticity of demand for crude oil is - 0 . 10. What will happen to the equilibrium price of crude oil? (a) It will fall by 5%. (b) It will rise by 5%. (c) It will rise by 20%. (d) It will rise by 50%. (e) It will rise by 30%. 8. The shrimp harvest was unusually good this year. The demand curve did not shift from last year, but because of the abundant harvest, the price fell from \$100 per sack to \$85 per sack. The price elasticity of demand for shrimp is - 1 . 40. What happened to the total revenue of ﬁshermen? Choose the closest answer. (a) It decreased by about 6%. (b) It decreased by about 12%. (c) It decreased by about 48%. (d)
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Q2S08 - Name Test Form A Economics 1 Quiz 2 May 7 2008 Each...

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