Question

1. Suppose we found a movement on the demand curve to the left. This change may be caused by a ____?

A. a lower cost of inputs.

B. a decrease of supply.

C. fall in the number of substitute goods.

D. rise in income.

2. The price of beef, which is used in making beef jerky, increases. In the market for beef jerky you would expect that ____?

A. the demand for beef jerky would increase and the price of beef jerky would increase.

B. the supply of beef jerky would increase and the price of beef jerky would decrease.

C. the demand for beef jerky would decrease and the price of beef jerky would fall.

D. the supply of beef jerky would decrease and the price of beef jerky would increase.

3. Suppose a new technology has lowered the cost of producing solar vehicles, you predict that in the market for solar vehicles, there will be a(n)____?

A. increase in the supply of solar vehicles, a lower price, an increase in the quantity demanded.

B. increase in the supply of solar vehicles, a higher price, and an increase in the demand.

C. decrease in the supply of solar vehicles, a higher price, and a decrease in the demand.

D. increase in the quantity supplied, a lower price, and an increase in the quantity demanded.

Answer 1

1. D) If the good is an inferior good, then a rise in income would cause the demand of good to decrease.

2.D) The price of beef increases which is used in making beef jerky so the cost of production of beef jerky increases as a result, the supply curve will shift leftward causing a higher price and lower equilibrium quantity.

3. D) As .the cost of producing solar vehicles reduce, the supply curve shifts right thus lowering price and increasing the equilibrium quantity,i.e., the quantity demanded and the quantity supplied.