week5 quiz(2) - Textbook Reading Comprehension Questions Unit II(sections 5-9 1 If travelers consider rail travel and air travel to be substitutes then

week5 quiz(2) - Textbook Reading Comprehension Questions...

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1 Textbook Reading Comprehension Questions: Unit II (sections 5-9) 1. If travelers consider rail travel and air travel to be substitutes, then a reduction in the price of rail travel will likely result in: 1. A shift to the left of the air travel demand curve. 2. A shift to the right of the air travel demand curve. 3. A shift to the left of the air travel supply curve. 4. A shift to the right of the air travel supply curve. 5. A movement to a higher point on the air travel demand curve and to a lower point on the air travel supply curve. 2. If the quantity demanded of a product exceeds the quantity supplied: 1. We know that consumer and producer expectations of costs and benefits are not equal. 2. We know that there will be an excess supply (surplus) of the product. 3. We know that there will be an excess demand (shortage) of the product. 4. We know that we will be in market equilibrium. 5. We know that firms will respond by lowering price. 3.According to the demand and supply model, which of the following would we predict would bethe result of the following market shocks? 1. A simultaneous increase in both demand and supply of a product will lead to a higher market equilibrium price for the product. 2. A simultaneous reduction in both demand and supply of a product will lead to a lower market equilibrium quantity bought and sold of the product. 3. An increase in supply along with a simultaneous reduction in demand will lead to a lower market equilibrium quantity bought and sold of the product. 4. A decrease in supply along with a simultaneous increase in demand will lead to a lower market equilibrium price for the product. 5. None of the above 4.If consumers and producers are responsive to price changes, then what can we expect tohappen to the market equilibrium price and quantity bought and sold if a market is hit by asimultaneous increase in both demand and supply? 1. Both Pe and Qe increase 2. Pe decreases and Qe increases 3. Pe increases but we cannot predict the change in Qe 4. We cannot predict the change in Pe, but Qe increases 5. None of the above 5. If consumer income rises, we can expect a change in _________. If market price rises, we can expect a change in ________. 1. Demand; quantity demanded 2. Quantity demanded; demand 3. Demand; demand 4. Demand; supply 5. Supply; quantity supplied
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