AP Micro Unit 2

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

• direct, inverse

• inverse, direct

• inverse, inverse

• direct, direct

• strong, weak

An increase in the price of a product will reduce the quantity demanded for that product because:

• supply curves are upward sloping

• the higher price means purchasing power has risen

• consumers will substitute other products for the one whose price has risen

• consumers get increasing marginal utility for each new unit of a good they consume

• more complementary goods will be purchased due to the resultant increase in consumer surplus

Which of the following will NOT cause the demand for video games to change?

• a change in the price of a close substitute

• a change in consumer incomes

• a change in the price of video games

• a change in consumer tastes

• a change in consumer preferences

An economist for a computer company predicts that a rise in consumer incomes will increase the demand for computers. This prediction assumes that

• there are many substitutes for computers

• there are many complementary goods for computers

• there are few goods that are substitutes for computers

• computers are normal goods

• computers are an inferior good

Which of the following statements is correct?

• A decrease in the price of X will increase the demand for substitute product Y

• A decrease in income will decrease the demand for an inferior good

• An increase in income will decrease the demand for a normal good

• An increase in the price of X will decrease the demand for complementary product Y

• An increase in the price of X will increase the demand for complementary product Y

A leftward shift of a supply curve for avocados (a normal good) might be caused by:

• an improvement in avocado picking techniques

• a decrease in the wages that must be paid to avocado pickers

• an increase in consumer incomes

• some avocado farmers leaving the market

• a news report stating that avocados are associated with good health

Assuming Ramen noodles are an inferior good, a decrease in income will shift the

• supply curve for Ramen noodles to the left.

• supply curve for Ramen noodles to the right.

• demand curve for Ramen noodles to the left.

• demand curve for Ramen noodles to the right.

• there is no shift.

Which of the following events will cause the demand curve for hamburgers to shift to the right?

• An increase in the price of hamburgers.

• An increase in the price of pizza, a substitute for hamburgers.

• An increase in the price of French fries, a complement to burgers.

• A decrease in the number of hamburger consumers.

• A decrease in the cost of producing hamburgers.

Refer to Figure A. At price $20, which of the following would occur?

• Shortage of 100.

• Shortage of 150.

• Surplus of 200.

• Surplus of 50.

• Surplus of $100.

Refer to Figure A. What would be the effect of a price floor at $60?

• It would be ineffective.

• A shortage of 50.

• Quantity demanded would increase.

• A shortage of 100.

• A surplus of 100.