PRACRICE_MID-I

PRACRICE_MID-I - PRACRICE MID-TERM I 1."As the price...

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PRACRICE MID-TERM I 1."As the price of personal computers continues to fall, demand increases." This headline is inaccurate because A) a change in the price of personal computers shifts the demand curve. B) a change in the price of personal computers shifts the supply curve. C) the statement is backwards: increased demand leads to lower prices. D) falling prices for personal computers increases quantity demanded, not demand. E) falling prices for personal computers increases quantity supplied. 2.What might cause a demand function to shift to the right ? A) An increase in the price of a substitute. B) An increase in the product's own price. C) An increase in the price of a complement. D) A decrease in the price of a substitute. E) An expectation that the product's own price will fall in the future. 3.If the price of computers increases and the demand for monitors decreases, then A) computers and monitors are complements. B) computers are a normal good and monitors are inferior. C) computers and monitors are substitutes. D) computers are an inferior good and monitors are normal. E) none of the above is true. 4.As consumers' incomes increase, the demand for ground beef decreases. Ground beef is called a(n) A) normal good. B) complement good. C) substitute good. D) defective good. E) inferior good. 5.Increases in the prices firms pay for inputs causes a(n) A) decrease in quantity supplied. D) decrease in supply. B) increase in supply. E) output prices to fall. C) increase in quantity supplied. 6.Suppose that both supply and demand for DVD players decrease. One can predict that the A) equilibrium price will rise but the equilibrium quantity can increase or decrease. B) equilibrium price and quantity will decrease. C) equilibrium price and quantity will rise. D) equilibrium quantity will fall but the equilibrium price can rise or fall. E) change in price and quantity are both unknown. 1
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P r i c e Q u a n t i t y 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 1 0 2 0 3 0 4 0 5 0 6 0 7 0 7. At a price of $20, A) the market would be in equilibrium. B) there would be excess supply of approximately 25 units. C) there would be excess demand of approximately 25 units. D) there would be excess demand, but it is impossible to know by how much. E) There would be excess supply, but it is impossible to know by how much. 8. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result? A) They would all make a large profit because $45 is more than the equilibrium price. B) They would all just break even because $45 is their reservation price. C) They would be forced to lower their prices because at $45 there would be excess supply. D) They would be forced to raise their prices because at $45 there would be excess demand. E) They would be forced to lower their prices because at $45 there would be
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This note was uploaded on 10/07/2011 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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PRACRICE_MID-I - PRACRICE MID-TERM I 1."As the price...

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