Econ Assignment 1

How are equilibrium price and quantity affected when the buyers' income increases

• An entire shift in the supply curve

• A movement along the demand curve

• A shift of the demand curve - rightward

• A shift of the demand curve - leftward

How does an increase in the price of shoes affects the price of a pair of socks and the number of pairs of socks bought and sold.

• An entire shift in the supply curve

• A movement along the demand curve

• A shift of the demand curve - rightward

• A shift of the demand curve - leftward

How do the equilibrium price and the quantity of a commodity change when price of input used in its production decreases?

• Equilibrium price increases; equilibrium quality increases

• Equilibrium price decreases; equilibrium quality increases

• Equilibrium price and quality are unchanged

• Equilibrium price increases; equilibrium quality decreases

How are the equilibrium price and quantity affected when the demand and supply curves shift in opposite directions AND the decrease in dd < increase in ss

• Equilibrium price decrease; equilibrium quantity decrease

• Equilibrium price increase; equilibrium quantity increase

• Equilibrium price decrease; equilibrium quantity decrease

• Equilibrium price decrease; equilibrium quantity increase

Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.

• 0.85

• 0.8

• 0.7

• 0.58

Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and Y are:

• Complementary goods.

• Substitute goods.

• Unrelated goods.

• Neither complementary nor substitute goods.

Which of the following would NOT shift the demand curve for a good or service?

• A change in income.

• A change in the price of a related good.

• A change in expectations about the price of the good or service.

• A change in the price of the good or service.

Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, we would expect:

• The supply of flour to be unaffected.

• The supply of flour to increase.

• The demand of flour to increase.

• The demand of flour to decrease.

Imagine a supply curve shifting towards the right. This would mean:

• A decrease in the price of the good.

• An increase in the income.

• Worsening of technology.

• An improvement of technology.

In the above figure, a change in quantity demanded with unchanged demand is represented by a movement from

• a to c

• a to d

• a to b

• none of the above