ECON-StudyGuide3 - 1. The law of supply indicates that...

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1. The law of supply indicates that producers will offer more of a product at high prices than they will at low prices. 2. Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates that the amount of oranges that will be available at various prices has declined. 3. A decrease in the demand for recreational fishing boats might be caused by an increase in the: price of outboard motors 4. A recent study found that an increase in the Federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that: beer and marijuana are complementary goods. 5. Tennis rackets and ballpoint pens are: independent goods 6. A decrease in the price of digital cameras will: shift the demand curve for memory cards to the right. 7. Data from the registrar's office at Gigantic State University indicate that over the past twenty years tuition and enrollment have both increased. From this information we can conclude that: school-age population, incomes, and preferences for education have changed over the twenty-year period. 8. Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will decrease, quantity demanded will increase, and quantity supplied will decrease. 9. If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium: price must rise, but equilibrium quantity may rise, fall, or remain unchanged. 10. The supply curve shows the relationship between: price and quantity supplied 11. Which of the following statements is correct? If supply increases and demand decreases, equilibrium price will fall.
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12. If a product is in surplus supply, its price: is above the equilibrium level.
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This note was uploaded on 07/13/2011 for the course ECON 131 taught by Professor Staff during the Spring '03 term at Hawaii.

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ECON-StudyGuide3 - 1. The law of supply indicates that...

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