Question

9. A shift to the right of the demand curve could be caused by a(n): A decrease in tastes or preferences. B decrease in the price of a substitute. C increase in income if the good is normal. D increase in the price of a complement.

10. Suppose that summer in a resort town is very rainy. We can expect demand to shift and the equilibrium price for hotels to . A left; fall B left; rise C right; fall D right; rise

11. If the price the U.S. Post Office charges to deliver Express Mail rises, the demand facing FedEx will rise because its respective services are: A substitute goods B complementary goods C inferior goods D luxury goods

12. Which of the following would cause a decrease in the demand for coffee? (Assume tea is a substitute for coffee.) A an increase in the price of tea B a decrease in the price of tea C an increase in the price of coffee D a decrease in the price of coffee 4 ECO101/MBA 520 Problem Set 2: Supply and Demand C. Garber

13. In the figure below, what would cause a shift from D1 to D2(it shifted up)? A a decrease in the price of honey B a new virus that decimates the bee population C a new study that shows that honey cures cancer D a decrease in population

14. Which of the following will NOT cause a change in supply? A a tax on the good B a better production technology C a change in the price of the good D an increase in the cost of input resources

15. Suppose that the price of pork rises. We would expect that the supply of beef will A fall because pork is a resource used in beef production B fall because farmers will shift resources from beef production to pork production C rise because pork is a resource used in beef production D rise because farmers will shift resources from beef production to pork production

Answer 1

a)  "C" increase in income if the good is normal.

b) "A" the curve will shift to the left and the price will decrease.

c) "A" because US mail and fed ex are substitute.

d) "B" a decrease in the price of the tea will shift the demand curve to the left.

e) (Figure is missing)

f) "C" a change in the price will cause a change in the quantity supplied and not change in the supply.

g) "B" fall because the farmers will produce those goods that can fetch more price.