practicequestions3fall2004

practicequestions3fall2004 - Econ 102 Fall 2004 Practice...

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Econ 102 Fall 2004 Practice Questions 3 Readings: Chapter 3: Supply and Demand Concepts: Market Substitute Demand Complement Supply Price Ceiling Normal Good Price floors Inferior Good Consumer and Producer Surplus I. Binary Choices: 1) The equilibrium price in a market is decided by suppliers who produce the good. a. True. b. False. 2) An increase in excise taxes levied on the buyers of computers and an increase in subsidies to HiTech industries will result in a lower equilibrium price in the computer market. a. True. b. False. 3) An increase in income always results in an increase in the demand for a good. a. True. b. False. 4) Income can be larger than wealth. a. True. b. False. 5) Mr. Ford says: “You can choose the car you want, provided that it is a Model-T and it is black”. The price of saddles (and the stock market value of ConfortBottom, leader in the industry) goes down. a. True. b. False. 6) As a result of a demand shock in a market, there will always be a simultaneous increase in both the equilibrium price of a good and the quantity that is demanded. a. True b. False II. Multiple Choices: 7) A normal good is a good that: a. is usually consumed by people. b. is not weird. c. is consumed in a normal quantity by a household with an average income. d. is consumed in larger quantities when income increases.
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8) Which of the following doesn't affect the demand curve for ski-boots? a.
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practicequestions3fall2004 - Econ 102 Fall 2004 Practice...

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