1. Consider the market for SUVs. If the price of gasoline increases by 150% we w
ID: 1098444 • Letter: 1
Question
1. Consider the market for SUVs. If the price of gasoline increases by 150% we would expect the equilibrium price of SUVs to _____ and the equilibrium quantity to _____.
a) increase; increase
b) increase; decrease
c) decrease; increase
d) decrease; decrease
* Please Explain
2. Which of the following events would cause the supply of gum to FALL?
a) A discovery that chewing gum reduces tooth decay.
b) An increase in the price of cinnamon.
c) A rise in income (assuming gum is a normal good).
d) A rising population.
*Please explain
1. An increase in the price of Snapple drinks
a) causes the supply of bottled water to shift right.
b) causes the demand for Snapple drinks to shift left.
c) causes the demand for bottled water to shift right.
d) causes none of the above.
*Please explain
2. In terms of the factors of production, the computer on my desk in Mahar is an example of
a) land.
b) labor.
c) capital.
d) entrepreneurship.
* Please Explain
3. When both demand and supply increase (hint: think about each separately, then put them together)
a) the equilibrium price definitely falls.
b) the equilibrium price definitely rises.
c) the equilibrium quantity definitely falls.
d) the equilibrium quantity definitely rises.
*Please explain
Explanation / Answer
1. Consider the market for SUVs. If the price of gasoline increases by 150% we would expect the equilibrium price of SUVs to _____ and the equilibrium quantity to _____.
b) increase; decrease
* Please Explain
2. Which of the following events would cause the supply of gum to FALL?
a) A discovery that chewing gum reduces tooth decay.
*Please explain
1. An increase in the price of Snapple drinks
a) causes the supply of bottled water to shift right.
*Please explain
2. In terms of the factors of production, the computer on my desk in Mahar is an example of
d) entrepreneurship.
* Please Explain
3. When both demand and supply increase (hint: think about each separately, then put them together)
b) the equilibrium price definitely rises.
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