An increase in price could occur due to a(n)
a. Increase in demand and no change in supply
b. Decrease in supply and no change in demand
c. An increase in demand and decrease in supply
d. All of the above
QUESTION 2You want to run a difference-in-difference experiment with a price increase for your lawn chairs in Miami, FL. If you are worried about the representativeness of your control group, a good comparison city would be
a. Boston, MA
b. San Francisco, CA
c. St. Paul, MN
d. Tampa Bay, FL
QUESTION 3People like consuming peanut butter and jelly together. The price of peanuts increases. At the same time, we see the price for Jelly rise. This would make the price for peanut butter_____________ and the quantity demanded for peanut butter ____________.
a. Uncertain; decreases
b. Decreases; increases
c. Decreases; uncertain
d. Increases; uncertain
QUESTION 4You put your product on 20 off sale market A but leave it unchanged in market B. Sales in A increase from 840 to 1040 units per week while sales in B rise from 770 to 830 . The Difference-in-difference estimate of the effect of the price change is:
a. 80 units
b. 100 units
c. 120 units
d. 130 units
QUESTION 5An increase in the income of bus riders, accompanied by a simultaneous increase in the wages of the bus drivers causes, the price for bus rides(an inferior good) _____________ and the quantity demanded for bus rides ____________.
a. Decreases; decreases
b. Increase; increases
c. Uncertain, Decreases
d. Uncertain, Increases
QUESTION 6You increase the advertising intensity for your product in market A but not in market B. Sales in A rise from 1140 to 1180 units per week while sales in B fall from 1270 to 1230 . The Difference-in-difference estimate of the effect of the increased advertising is:
a. 0 units
b. 80 units
c. 100 units
d. 120 units
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