1. Which of the following would most likely cause the demand for veggie-burgers to increase?
a. A decline in the price of veggie-burgers.
b. An increase in the price of tofu-burgers perceived as a substitute for veggie-burgers.
c. An increase in the price of burger buns.
d. A technological innovation that lowers the cost of producing veggie-burgers.
2. Suppose a new chip has been invented which makes the computer (a normal good) cheaper to manufacture while, at the same time, the incomes of consumers decreased. What would be the result in the home computer industry?
a. Quantity unambiguously decreases while the price change is uncertain.
b. Quantity unambiguously increases while the price change is uncertain.
c. Price unambiguously decreases while the quantity change is uncertain.
d. Price unambiguously increases while the quantity change is uncertain.
3. "The winds of the recent hurricanes in Florida are bringing soothing financial gains to California citrus growers. Due to the extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever."
Which of the following statements best explains the economics of the quotation?
a. The supply of Florida oranges has decreased, causing their prices to increase and the demand for the substitute California oranges to also increase.
b. The supply of Florida oranges has decreased, causing the supply of California oranges to increase and their prices to rise.
c. The demand for Florida oranges has been reduced by the hurricanes, causing a greater demand for the California oranges and an increase in their price.
d. The demand for Florida oranges has been reduced causing their prices to fall and therefore increasing the demand for the substitute California oranges.
4. Which of the following best describes the economic concept of demand?
a. A relation showing the quantities of a good that consumers are willing and able to buy at various prices during a given period of time, other things constant.
b. A relation showing the quantities of a good that producers are willing and able to supply at various prices during a given period of time, other things constant.
c. A relation showing the quantity of a good that consumers would most prefer to have during a given period of time, regardless of price.
d. None of the above.
5. Increases in demand for ethanol fuel has likewise driven up the demand for corn. As a result, corn prices have risen. The production of beer uses other agricultural crops, such as barley, which can be grown in the same climate and land conditions as corn. The likely impact of this event on the beer market is
a. An increase in the demand for beer driving beer prices higher.
b. A decrease in the demand for beer driving beer prices lower.
c. An increase in the supply of beer driving beer prices lower.
d. A decrease in the supply of beer driving beer prices higher.
6. Which of the following goods is most likely to be an inferior good?
a. Rib Eye Steak
b. A Trek bicycle
c. Hot Dogs
d. French Wine
7. Which of the following is most likely to decrease the supply of pink salmon?
a. A decline in the price of salmon.
b. An increase in the price of white wine, a complement good.
c. A virus that results in decreased egg production in pink salmon.
d. A technological advance in fishing techniques.
8. In order to balance the County's budget, the County Executive increased the price of using the Frequent Flyer shuttle to SummerFest from $6 to $9. After this price increase was put into effect, however, the County Executive found that revenue from the Flyer actually decreased. We can conclude that the demand for the Frequent Flyer Shuttle is:
a. elastic
b. inelastic
c. unit elastic
d. zero elastic
9. In order to balance the County's budget, the County Executive increased the price of using the Frequent Flyer Shuttle to SummerFest from $6 to $9. The percentage change in the price of the Frequent Flyer Shuttle was:
a. $3
b. 50%
c. 33%
d. Impossible to determine with the information given.
