Microeconomics Question

If Ily and Billy are the only sellers in the market for latte, then the market supply for latte is the vertical summation of Iily's and Bill's supply curves.
a.) True
b.) False

What is the effect of a decrease in price of CD's and a decrease in cost of royalties on the equilibrium price and quantity of music downloads? (HINT: royalties are part of sellers' costs)

a. both the equilibrium price and quantity would increase.
b. both the equilibrium price and quantity would decrease.
c. the equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.

When both the demand and supply curve shift, the curve that shifts with the greater magnitude determines the effect on the undetermined equilibrium object.

a. true
b. false

The intersection of supply and demand curves determines the unique market equilibrium, however buyers as a group determine the demand for the product while sellers as a group determine the supply of the product.
a. true
b. false

Suppose that Alanna receives a pay increase. We would expect...
a.) to observe Alanna moving down and to the right along her given demand curve.
b.) Alanna's demand for each inferior goods to increase.
c.) Alanna's demand for normal goods to increase.

Equilibrium Quantity must increase when demand
a.) decrease and supply does not change, when demand does not change and supply decrease, and when both demand and supply increase.

b.) increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.

A price increase has two effects on total revenue: an increase in revenue from higher price, and a fall in revenue from lower quantity due to the law of demand. Which of these two effects is bigger?
a.) an increase in revenue from higher price.
b.)it depends on the price elasticity of demand.
c.) a fall in revenue from lower quantity.

If demand is __________, the fall in revenue from lower quantity demanded is greater than the increase in revenue from higher price, so total revenue ________.
a. elastic, falls
d. inelastic, falls

The supply of beachfront property is inelastic. The supply of new cars is elastic. Suppose population growth causes demand for both goods to double. For which which product will price change the most? (HINT: which has the steeper supply curve?)

a.) beachfront property
b.) new cars

Computers and software are complements. Hence, we would expect the ___________________.
a.) cross-price elasticity > 0
b.) cross-price elasticity < 0
c.) income elasticity

Demand is less elastic in the short run, for necessities, for broadly defined goods, and for goods with few close substitutes.
a.) true
b.) false