AP MACRO 1.4-1.6

The relationship between quantity supplied and price is ________, and the relationship between quantity demanded and price is _________

• direct, inverse

• inverse, direct

• inverse, inverse

• direct, direct

• strong, weak

Which of the following will NOT cause the demand for video games to change?

• a change in the price of a close substitute

• a change in consumer incomes

• a change in the price of video games

• a change in consumer tastes

• a change in consumer preferences

An economist for a computer company predicts that a rise in consumer incomes will increase the demand for consumers. This prediction assumes that:

• there are many subs for computers

• there are many complementary goods for computers

• there are few goods that are substitutes for computers

• computers are normal goods

• computers are inferior goods

Which of the following statements is correct?

• A decrease in the price of X will increase the demand for substitute product Y

• A decrease in income will decrease the demand for an inferior good

• An increase in income will decrease the demand for a normal good

• An increase in the price of X will decrease the demand for complementary product Y

• An increase in the price of X will increase the demand for complementary product Y

A leftward shift of the supply curve for avocados ( a normal good) might be caused by:

• an improvement in avocado picking techniques

• a decrease in the wages that must be paid to avocado pickers

• an increase in consumer incomes

• some avocado farmers leaving the market

• a news report stating that avocados are associated with good health

Assuming Ramen is an inferior good, a decrease in income will shift the:

• supply curve for Ramen to the left

• supply curve for Ramen to the right

• demand curve for ramen to the right

• demand curve for ramen to the left

• there is no shift

Refer to Figure A (note: x axis should NOT be valued in $). At a price of $20, which of the following would occur?

• Shortage of 100

• Shortage of 150

• Surplus of 200

• Surplus of 50

• Surplus of 100

Refer to figure A. What would be the effect of a price floor at $60

• It would be ineffective

• A shortage of 50

• Quantity demanded would increse

• a shortage of 100

• a surplus of 100

If the cost of producing cell phones increases, the price and equilibrium quantity of cell phones will most likely change in which of the following ways?

• P Increase Q increase

• P Increase Q decrease

• P decrease Q increase

• P decrease Q decrease

• P no change Q decrease

Other things staying equal, if the price of a key resource used to produce product X falls, the:

• product supply curve of X will shift Right

• product demand curve of X will shift to the right

• product supply curve of x will shift to the left

• product demand curve of x will shift to the left

• both supply and demand of X will increase