W1105- Principles of Economics, Prof. Desai Fall 2010 417 IAB Class Exercise Set I Prof. Desai will discuss the questions on Wed, September 15 during the lecture (6:10pm-7:25pm). Please carry a copy with you to the lecture WITHOUT FAIL. NO HARD COPIES WILL BE PROVIDED IN THE CLASS. 1) If the real income of a consumer decreases and, as a result, his demand for product X increases, it can be concluded that product X is a/an a) complementary good b) normal good c) inferior good d) substitute good 2) On the New York Stock Exchange, the current price per share for stock of the Boston Celtics,a NBA basketball team, is $8.25. At that price the total quantity of shares demanded is 2,500, while the total quantity supplied for trade is 2,000. It follows that a) $8.25 is the equilibrium price per share b) there will be downward pressure on the price of shares of the Boston Celtics c) there is a surplus of shares of the Boston Celtics on the stock exchange
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