Question

1. The income effect of a price change results in a A. Shift of the demand...

1. The income effect of a price change results in a

A. Shift of the demand curve when income changes

B. Movement along the demand curve due to a change in relative prices

C. Shift of the demand curve due to a change in purchasing power brought about by the price change

D. Movement along the demand curve due to a change in purchasing power brought by the price change

2. If a decerease in income leads to a decrease in the demand for ice cream, then ice cream is

A. A necessity

B. A complement

C. A neutral good

D. A normal good

3. Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied the same quantity of binders at $4 per unit. Based on this evidence, Tecumseh has experienced

A. An increase in the quantity supplied

B. A decrease in the quantity supplied

C. An increase in supply

D. A decrease in supply

4. A decrease in the price of inputs will cause the supply curve for a product to shift to the right

A. True

B. False

5. A surpllus is defined as the situation that exists when the quantity of a good supplied is greater than the quanity demanded

A. True

B. False

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Q1. Answer is D. Movement along the demand curve for change in purchasing power.

The explanation is as follows: One of the reason for applicability of law of demand, is the icnome effect as the reall income of the consumer changes with the change in prices, there is a change in quantity demanded hence movement along the demand curve for change in pruchasing power.

Q2. Answer is D. Normal goods.

The demand of normal goods changes in same direction with the change in income.

Q3. Answer is C. Increase in supply.

The explanation is as follows:

Increasse in supply take place on two basis: more supply at same price and same supply at less price.

Q4. Ansswwer is A. True

With the decrease in cost of inout, the supply will increase, which shift the supply curve to the right.

Q5. Answwer is A. True

The Surplus arises when the quantity supplied is more than quantity demanded.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When Demand increases, is that a shift of the curve or a movement along the curve?...
When Demand increases, is that a shift of the curve or a movement along the curve? Determine the direction of the shift or movement. When Supply decreases, is that a shift of the curve or a movement along the curve? Determine the direction of the shift or movement. When quantity demanded increases, is that a shift of the curve or a movement along the curve? Determine the direction of the shift or movement. When quantity supply decreases, is that a...
The difference between price elasticity of demand and income elasticity of demand is that A. income...
The difference between price elasticity of demand and income elasticity of demand is that A. income elasticity of demand examines how an​ individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes. B. income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price. C. income elasticity refers to a horizontal shift of the demand...
Table 4-1 Price per lb. of ice cream         Sven        Larry          Rest of Market        Market
Table 4-1 Price per lb. of ice cream         Sven        Larry          Rest of Market        Market        $8                  5             0                       7_______________        $6                  8             5                       9_______________        $5 11    9                      11______________        $4 14           11                     14______________        $3 17 14                     20______________ 1.Refer to Table 4-1. At $4 the quantity demanded in the market would be: A. 12 B. 22 C. 31 D. 39 E. 51 2.According to the law of supply: A. there is an inverse relationship between price and quantity...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the area above the demand curve and beneath the market price. C-the market price. D-the area beneath the demand curve and above the market price. Total producer surplus equals:     A-the area above the supply curve and beneath the market price. B-the area beneath the supply curve and above the demand curve. C-the market price. D-the supply curve. An increase in supply refers to:    ...
For each of the following markets, indicate whether the stated change causes a shift in the...
For each of the following markets, indicate whether the stated change causes a shift in the supply curve (a change in supply), a shift in the demand curve (a change in demand), a movement along the supply curve (a change in quantity supplied) or a movement along the demand curve (a change in quantity demanded). Clearly state any assumptions you make in drawing your conclusions. (a) The market for energy: China and India’s incomes increase over time. (b) The market...
Distinguish between a shift in supply and movement along the supply curve (change in quantity supplied)....
Distinguish between a shift in supply and movement along the supply curve (change in quantity supplied). What can cause each?
- Tom Brady should mow his own lawn because he is very athletic and has very...
- Tom Brady should mow his own lawn because he is very athletic and has very low opportunity cost of his time. (True/False) - The concept of comparative advantage is based on who uses fewer inputs to produce a good or service. (True/False) - A change in consumers' tastes lead to a movement along the demand curve. (True/False) - There is no difference between a movement along the demand curve and a shift in the demand curve. (True/False) - Law...
Distinguish between changes in “supply” and changes in “quantity supplied”. Which refers to a shift in...
Distinguish between changes in “supply” and changes in “quantity supplied”. Which refers to a shift in a supply curve and which refers to a movement along a supply curve? Discuss the factors that can cause a change in supply and demonstrate graphically an increase/ decrease in supply. What is the effect of an increase/ decrease in supply on equilibrium price and equilibrium quantity? Demonstrate graphically and explain.
The interest rate effect on aggregate demand indicates that a(n): A. Decrease in the price level...
The interest rate effect on aggregate demand indicates that a(n): A. Decrease in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending B. Decrease in the price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending C. Increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending D. Increase in the supply of money...
1. A change in the price of carrots will cause a movement along the demand curve...
1. A change in the price of carrots will cause a movement along the demand curve for substitute Vegetables, and a shift in the demand for carrots. True or false?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT