Reference no: EM13308455

1- Which of the following would not shift the demand for good A?

a) drop in price of good A.
b) drop in price of good B.
c) consumer income.
d) change in the level of advertising of good A.

2. Which of the following pairs of goods are probably complements:

a) televisions and roller skates.
b) frozen yogurt and ice cream.
c) steak and chicken.
d) hamburgers and ketchup.
3 . Suppose the demand for good X is given by Qdx= 10 + ax Px + ay Py aM M. If ay is positive, then:

a) goods y and x are complements.
b) goods y and x are inferior goods.
c) goods y and x are normal goods.
d) goods y and x are substitutes.

4. If a shortage exists in a market, the natural tendency is for:
a) demand to increase.
b) price to increase.
c) quantity supplied to decrease.
d) no change in the market.

5. Suppose market demand and supply are given by Q d = 100 - 2P and Q s = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be:
a) $1,650.
b) $1,375.
c) $900.
d) $1,125.

6. Suppose both supply and demand decrease. What effect will this have on price?
a) it will fall.
b) it will rise.
c) it may rise or fall.
d) it will remain the same.