1. Which of the following could cause an increase in the demand for peanut butter?

 

Instructions: You may select more than one answer.

 

An increase in the price of jelly.

An increase in consumer incomes (if peanut butter is a normal good).

An increase in the expected future price of peanut butter.

A decrease in the price of peanut butter.

An increase in the number of buyers in the market. 

 

Which of the following could cause a decrease in the demand for jelly?

 

Instructions: You may select more than one answer.

 

A decrease in income, if jelly is an inferior good.

A decrease in the expected future price of peanut butter.

A news report that jelly is hazardous.

An increase in the price of jelly.

An increase in the price of peanut butter (if peanut butter and jelly are complements).

 

2. Which of the following could cause an increase in the supply of peanut butter?

 

Instructions: You may select more than one answer.

 

An increase in the price of jelly.

A decrease in the expected future price of peanut butter.

An increase in the number of firms in the market.

An improvement in technology.

A decrease in the price of peanut butter. 

 

Which of the following could cause a decrease in the supply of jelly?

 

Instructions: You may select more than one answer.  

A decrease in the expected future price of jelly.

An increase in the price of sugar, an input to jelly production.

A decrease in income, if jelly is an inferior good.

An increase in the price of jelly.

An increase in the price of peanut butter. 

 

3. Consider the market for books.

 

What would happen to the equilibrium price and quantity of books if consumer incomes rise? (Assume that books are a normal good.)

 

Price and quantity will increase.

Price and quantity will decrease.

Price will increase, and quantity will decrease.

Price will decrease, and quantity will increase. 

 

What would happen to the equilibrium price and quantity of books if the price of paper rises? 

 

Price and quantity will increase.

Price and quantity will decrease.

Price will increase, and quantity will decrease.

Price will decrease, and quantity will increase. 

If both of these changes happen at the same time, the equilibrium price will increase/ will decrease/ cannot be determined, and the equilibrium quantity will increase/ will decrease/ cannot be determined. 

 

4. Consider the market for pizza.

 

Which of the following would cause a decrease in market equilibrium price and quantity?

 

A decrease in the number of pizza buyers.

A decrease in the number of pizzerias.

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

A decrease in the price of cheese, an input to pizza.

An improvement in pizza-making technology. 

 

Which of the following would cause the equilibrium price to fall while the equilibrium quantity rises?

 

A decrease in the number of pizza buyers.

An increase in the price of cheese, an input to pizza.

A decrease in the number of pizzerias.

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

.An improvement in pizza-making technology.