SOLUTIONS (2)

# SOLUTIONS (2) - and Jwowws numbers by 4: Our new situation...

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Solutions to Practice Problems 1. c 2. b 3. d, remember that quantity supplied increases 4. c 5. b 6. a, since concrete is a resource used to build homes, costs have risen to produce homes. Thus, the supply curve will shift left. 7. b, since a change in supply is always different than a change in quantity supplied. Remember that a change in quantity supplied can only be caused by a change in price. 8. a, since costs affect suppliers, the supply of kegs will decrease. 9. c, since a change in consumer income affects demand. A decrease in consumer income decreases demand which is a shift to the left. 10. c, since price affects quantity demanded. As the price falls, quantity demanded rises. 11. b 12. e

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Macroeconomics Test 1 Packet (Calhoun) Fall 2010 2 13. c Our original “situation” is: Bump-its Ice Packs Snookers 4 6 Jwoww 3 4 Now let’s get our Bump - its number to match for both girls. Multiply Snookers’ numbers by 3
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Unformatted text preview: and Jwowws numbers by 4: Our new situation is: Bump-its Ice Packs Snookers 12 18 Jwoww 12 16 Snookers has a comparative advantage in ice packs and Jwoww has a comparative advantage in Bump-its. Thus, Snookers should make ice packs and Jwoww should make Bump-its. 14. b 15. d, the demand for Tanqueray gin decreases (shift demand to the left) meaning there is a lower price and lower quantity sold for gin. 16. a 17. c, when consumer income rises, demand shifts to the right. This leads to an increase in price and quantity sold. (draw your graph) 18. c 19. e 20. d 21. d, this is a TOUGH question! First, note that as the price of melons rise, the quantity supplied of melons will rise not the supply. This eliminates choice a. and b. Now this question relates to the examples in 5a. of Chapter 1. When the price of melons rises, the (opportunity) cost of producing grapes rises. Therefore, the supply of grapes decreases....
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## This document was uploaded on 11/01/2011 for the course ECO ECO2013 at FSU.

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SOLUTIONS (2) - and Jwowws numbers by 4: Our new situation...

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