question
Which statement is NOT true about the law of demand?
answer
When price of a good rises, the quantity demanded will rise.
question
When John's income goes up, he spends more on sport shoes. What type of good are sport shoes?
answer
Normal good.
question
Which factor does NOT shift the demand curve for apples?
answer
Price of apples.
question
Due to Corona virus outbreak people prefer to eat at home and not at restaurants. What is the likely effect of this market?
answer
Demand curve for eating in restaurants shifts to the left.
question
A sheriff in small city in California decides to focus on fighting drug dealers in order to reduce the distribution of drugs in the city. At the same time the city officials start addiction awareness sessions for young people. What is the likely effect of these changes on the market for drugs?
answer
The change in equilibrium price is ambiguous, the equilibrium quantity decreases.
question
Both consumers and producers of gas expect that its price will increase in the future. What is the likely effect of their expectations on the market for gas today?
answer
p= increases, q= ambiguous
question
Suppose the market for avocados in Fresno follows the demand equation P = -Q+2 and supply equation P = 2Q (quantities are in 1000). What are the equilibrium price and quantity?
answer
p=4/3, q=2/3
question
Suppose the market for avocados in Fresno follows the demand equation P = -Q+2 and supply equation P = 2Q (quantities are in 1000). Which statement is true at p = 1?
answer
There is an excess demand = 0.5.
question
Which factor can shift both a supply curve and a demand curve?
answer
Expected price.
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