Question

19. An increase in the quantity demanded of a good is most often due to: a. a decrease in the price of a substitute good. b. higher prices. c. an increase in wages paid to workers. d. lower prices. 20.- An increase in the supply of the product implies: a. producers will now charge a lower price for a given quantity of output. b. the price of this product has increased. c. the supply curve will shift to the left. d. producers will now charge a higher price for a given quantity of output. 21.- A decrease in supply means that: a. the supply curve will shift to the right. b. there is a movement down and to the left along the supply curve. c. the quantity supplied at every price will decrease. d. there is a movement upward and to the right along the supply curve. 22.-Ceteris paribus, which of the following would cause a decrease in the demand for HD TVs, a normal good? a. decrease in consumers' income. b. decline in the price of HD TVs. e. increase in the price of HD TVs. d. increase in consumers' income. 23.- At a price of $5, Sam buys 10 units of a product; when the price increases to S6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct? a. No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed b. No, Martha is incorrect. Sam's demand has increased. c. Yes, Martha is correct. Sam's demand has decreased. d. No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased

Answer 1

19. An increase in the quantity demanded of a good is most often due to lower prices. Hence,option(D) is correct.

20. An increase in the supply of the product implies producers will now charge a lower price for a given quantity of output. Because as there is increase in supply , supply curve shifts to the right and therefore for a given quantity of output ,price charged decreases. Hence,option(A) is correct.

21. A decrease in supply means that the quantity supplied at every price will decrease. Because decrease in supply shifts the supply curve shifts to the left and therefore at every price , quantity supplied decreases. Hence,option(C) is correct.

22. A decrease in consumer's income would decrease the demand for HD TVs , a normal good. Hence,option(A) is correct.

23.When P=$5 , Q=10 and When P= $6 ,Q=8 units. No, Martha is incorrect that Sam's demand has decreases because Sam's quantity demanded has decreased and his demand has not changed , because the change is because of the change in price. Hence, option(A) is correct.