How would a decrease in consumer income affect the market for new automobiles?
a. Demand would decrease, leading to an increase in price and a reduction in quantity sold.
b. Demand would decrease, leading to a reduction in price and a reduction in quantity sold.
c. Demand would increase, leading to an increase in price and an increase in quantity sold.
d. Demand would increase, leading to a reduction in price and an increase in quantity sold.
QUESTION 2If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by a(n):
a. increase in the supply of the good. b. increase in the demand for the good.
c. decrease in the demand for the good. d. decrease in the supply of the good.
QUESTION 3If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease.
b. Price would decrease, and quantity would decrease.
c. Price would increase, and quantity would increase.
d. Price would decrease, and quantity would increase.
QUESTION 4Over a ten year period, the monthly charge for cellular phone service decreased from 120 per month to 30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. An increase in consumer income over this ten year period
b. A reduction in the price of residential phone service, a substitute for cellular phone service
c. An increase in the wages of workers in the cellular phone industry
d. Technological improvements that reduced the cost of supplying cellular phone service
QUESTION 5If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by a(an):
a. increase in the supply of the good. b. increase in the demand for the good.
c. decrease in the demand for the good. d. decrease in the supply of the good.
QUESTION 6If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease.
b. Price would decrease, and quantity would decrease.
c. Price would increase, and quantity would increase.
d. Price would decrease, and quantity would increase.
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