ps4 - EC 101.03 Exercises for Chapter 4 FALL 2010 1. Which...

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EC 101.03 Exercises for Chapter 4 FALL 2010 1. Which of the following might cause the demand curve for an inferior good to shift to the left? 1
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a. a decrease in income b. an increase in the price of a substitute c. an increase in the price of a complement 2
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d. None of the above is correct. 3
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2. An increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, 4
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a. the demand for tires decreases and the supply of tires increases. b. the demand for tires is unaffected and the supply of tires decreases. c. the demand for tires is unaffected and the supply of tires increases. 5
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d. None of the above is necessarily correct. 6
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3. Which of the following is not a characteristic of a perfectly competitive market? 7
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a. Different sellers sell identical products. b. There are many sellers. c. Sellers must accept the price the market determines. 8
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d. All of the above are characteristics of a perfectly competitive market. 9
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4. Which of the following would not shift the demand curve for mp3 players? 10
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a. a decrease in the price of mp3 players b. a fad that makes mp3 players more popular among 12-25 year olds c. an increase in the price of CDs, a complement for mp3 players 11
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d. a decrease in the price of satellite radio, a substitute for mp3 players 12
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5. You lose your job and, as a result, you buy fewer romance novels. This shows that you consider romance novels to be a(n) 13
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a. luxury good. b. inferior good. c. normal good. 14
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d. complementary good. 15
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6. Currently you purchase 6 packages of hot dogs a month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase hot dogs in January. For you, hot dogs are 16
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a. a substitute good. b. a normal good. c. an inferior good. 17
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d. a complementary good. 18
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7. Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today’s demand curve for Mustangs 19
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a. shifts to the right. b. shifts to the left. c. shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. 20
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d. will not shift; rather, the demand curve for Mustangs will shift to the right next month. 21
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8. The supply curve for coffee 22
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shifts when the price of coffee changes because the price of coffee is measured on the vertical axis of the graph. b. shifts when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph.
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This note was uploaded on 03/18/2012 for the course ITEC 3290 taught by Professor Dunn during the Spring '12 term at East Carolina University .

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ps4 - EC 101.03 Exercises for Chapter 4 FALL 2010 1. Which...

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