For a given supply curve, an increase in demand will typically
a. increase price, but quantity could change in either direction
b. increase quantity, but price could change in either direction
c. increase price but leave quantity unchanged
d. decrease both quantity and price
e. increase both quantity and price
QUESTION 2What is the effect of a decrease in the price of potato chips on the market for pretzels?
a. Both equilibrium price and equilibrium quantity rise.
b. Both equilibrium price and equilibrium quantity fall.
c. Equilibrium price rises and equilibrium quantity falls.
d. Equilibrium price falls and equilibrium quantity rises.
e. Equilibrium price and equilibrium quantity remain unchanged.
QUESTION 3If the demand for bicycles increases,
a. the quantity demanded decreases
b. equilibrium price increases and equilibrium quantity decreases
c. equilibrium price decreases and equilibrium quantity increases
d. quantity supplied increases
e. quantity supplied decreases
QUESTION 4Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?
a. Price will increase and quantity decrease.
b. Price will increase and quantity increase.
c. Price will decrease and quantity increase.
d. Price will decrease and quantity decrease.
e. No change in equilibrium price and quantity will occur.
QUESTION 5Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?
a. a rise in the price of milk (a complement)
b. a rise in consumer incomes
c. a rise in the price of cookie dough
d. a drop in the price of cookie dough
e. a rise in the price of crackers (a substitute)
QUESTION 6Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?
a. Both price and quantity should increase.
b. Both price and quantity should decrease.
c. Price should increase and quantity decrease.
d. Price should decrease and quantity increase.
e. Nothing.
QUESTION 7Suppose that the price of compact disks (CDs) increases, other things equal. Which of the following in the most likely effect in the market for DVDs?
a. a decrease in demand for DVDs
b. an increase in demand for DVDs
c. an increase in quantity demanded of DVDs
d. a decrease in quantity demanded of DVDs
e. a decrease in the quantity supplied of DVDs
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