test_1_-_final

test_1_-_final - ECON 2010 Spring 2011 Test 1 February...

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ECON 2010 Spring 2011 Test 1 February 11 th , 2011 Hi, my name is ________________________________________________. I read the rules below and agree to conform to them. I understand that if I do not conform, academic misconduct charges can be filed against me. Sign:_____________________________________ 1. I will start and stop doing the test when I am told so. 2. I will not use any materials that are not allowed. Allowed materials are pencils, erasers, small scantron and highlighters. 3. My cell phone, laptop and any other similar electronic devices will stay turned off during the test. 4. I understand that only the answers on my scantron will count. 5. If I see a mistake in a question or if I do not understand the question I can ask about it to the proctor. But no changes will be made to any of the questions (except small typos). Therefore, I will answer that question as best as I can and object to it later by contacting the instructor.
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1) If Red Bull and Monster Energy are considered substitutes, then, other things equal, an increase in the price of Red Bull will A) decrease the demand for Red Bull. B) increase the demand for Monster. C) increase the quantity demanded for Monster. D) decrease the quantity demanded for Red Bull. 2) The income effect of a price change refers to the impact of a change in A) income on the price of a good. B) demand when income changes. C) the quantity demanded when income changes. D) the price of a good on a consumer s purchasing power. ʹ 3) If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is A) a neutral good. B) a normal good. C) a necessity. D) a complement. 4) Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year’s grape harvest. What happens in the California wine market as a result of this announcement? A) The demand curve for California wine shifts to the left in anticipation of higher prices in the future. B) The demand curve for California wine shifts to the right in anticipation of higher prices in the future. C) The supply curve for California wine shifts to the right in anticipation of higher prices in the future. D) The supply curve for California wine shifts to the left in anticipation of lower quantities in the future. 5) Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced A) a decrease in supply. B) an increase in supply. C) an increase in the quantity supplied. D) a decrease in the quantity supplied. 6) If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the A) price of its product will be lower in the future than it is today. B) price of its product will be higher in the future than it is today.
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This note was uploaded on 08/21/2011 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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test_1_-_final - ECON 2010 Spring 2011 Test 1 February...

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