Question

36) What would happen in the red apple market if the price of golden apples decreases? 36) A) The demand for red apples would increase B) The quantity demanded of red apples would increase C) The demand for red apples would fall. D) Nothing, they are separate and unrelated commodities. 37) Market demand shows: 37) A) the quantity of a good that one seller will sell at a given price B) the quantity of a good that one buyer will buy at a given price C) the quantities of a good that all sellers wll sell at all possible prices. D) the quantities of a good that all buyers will buy at all possible prices. 38) 39) When the price of a CD decreases: 39) A) the quantity demanded of CDs will decrease. B) the quantity demanded of CDs will increase. C) the demand for CDs will decrease D) the demand for CDs will increase 40) The substitution effect results in: 40) A) buyers buying more of a relatively cheaper good. B) sellers producing products when input prices fall C) sellers substituting less expensive inputs in production. D) buyers buying more of a good because their purchasing power has increased. 41) The income effect occurs when: 41) A) buyers buy more of a good because their purchasing power has increased. B) sellers produce more output because their profit has increased. C) buyers buy more of a relatively cheaper good. D) sellers hire more workers because buyers incomes have increased. 42) If the price of gasoline doubles while your income is constant: 42) A) consumers consumption of all goods will remain exactly the same. B) consumers substitute gasoline for other products you once consumed. C) consumers will continue to buy exactly the same amount of gasoline D) consumer purchasing power has decreased and consumers buy less of everything. 44) The phrase ceteris paribus means: A) seize the dayB) buyer beware C) all else equal. D) after this, before that. 45) A production situation with constant opportunity cost would be graphed as: 45) A) a negatively sloped curve bowed out from the origin. B) a negatively sloped straight line C) a positively sloped straight line. D) a negatively sloped curve bowed in toward the origin.

Answer 1

36. The price of golden apple decreases ,then the demand for red apple would fall because red and golden apple are substitute. Hence, option(C) is correct.

37. Market demand shows the quantities of a good that all buyers will buy at all possible prices. Hence, option(D) is correct.

39. When the price of a CD decreases ,the quantity demanded of CDs will increase . Hence, option(D) is correct.

40. The substitution effect results in buyers buying more of relatively cheaper good. Hence, option(A) is correct

41. The income effect occurs when buyers more of a good because their purchasing power has increased.Hence, option(A) is correct.

44. The ceteris paribus means all else equal . Hence, option(C) is correct.

45. A production situation with constant opportunity cost would be graphed as a negatively sloped straight line. Hence, option(B) is correct.