ECON 112 Review 1

If apples have a lot of substitutes like oranges, bananas, and grapes, demand for apples will be relatively elastic.

• True

• False

Which one of these factors will shift a supply curve to the right?

• An increase in preference

• An increase in income

• An increase in the price of a complement

• An increase in technology

The opportunity costs of going to college include things like tuition or housing costs

• True

• False

Consider a scenario where a popular brand of sneakers has a price elasticity of demand equal to -2. This implies that the demand for these sneakers is:

• relatively elastic

• relatively inelastic

• perfectly elastic

• perfectly inelastic

What will happen in the market for iPhones if the price of the Google Pixels drops?

• An increase in supply

• A decrease in supply

• An increase in demand

• A decrease in demand

When the price elasticity of demand is -0.6, an increase of ______ in the price will lead to a ______ in quantity demanded.

• 1 percent, 0.6 percent increase

• 1 percent, 0.6 percent decrease

• 1 percent, 6 percent decrease

• 0.6 percent, 1 percent increase

Two goods that have a cross price elasticity of demand equal to 2 are ______ goods.

• substitute

• complement

• inferior

• normal

A good such as ramen noodle would most likely have a income elasticity of demand equal to

• a negative number

• zero

• a positive number between 0 and 1

• a positive number larger than 1

Which of the following does not shift a good's demand curve?

• Consumers income

• Taxes

• Number of buyers

• The price of the good

If a good's demand increases and its supply decreases, which one is definitely true?

• The equilibrium price will decrease

• The equilibrium price will increase

• The equilibrium quantity will decrease

• The equilibrium quantity will increase