Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?
A) A
B) B
C) neither graph
D) both graphs
Ques. 2The regulation of the prices charged by insurance companies is known as
A) the Federal Register.
B) social regulation.
C) the market share test.
D) economic regulation.
Ques. 3The distinguishing characteristic of private goods is that
A) the principle of rival consumption does not apply to them.
B) their use is exclusive to the people who purchase them.
C) they can be sold but not rented.
D) they can be sold or rented, but not borrowed.
Ques. 4A good example of a monopolistic competitive industry is
A) the U.S. auto industry.
B) the public utility industry.
C) the computer game industry.
D) mining.
Ques. 5Refer to the above figure. If the government set a price floor of 3.50 per gallon, there would be
A) an excess quantity demanded equal to 100,000 gallons.
B) an excess quantity supplied equal to the distance BD.
C) an excess quantity supplied equal to the distance BF.
D) an excess quantity supplied equal to 100,000 gallons.
Ques. 6If A occurs then B will follow is a
A) positive statement.
B) normative statement.
C) non-testable statement.
D) statement lacking in logic.
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