1 The law of demand indicates that if the University of Minn

1) The \"law of demand\" indicates that if the University of Minnesota increases tuition, all other things remaining the same
A) both the demand for and the quantity of classes demanded will decrease at the University of Minnesota.
B) the quantity of classes demanded will increase at the University of Minnesota.
C) the demand for classes will increase at the University of Minnesota.
D) the quantity of classes demanded will decrease at the University of Minnesota.
E) the demand for classes will decrease at the University of Minnesota.
2) Changes in which of the following factors do NOT shift the demand curve?
A) the number of buyers
B) the price of the good
C) the price of a substitute good
D) the price expected in the future
E) buyers\' incomes
3) If the demand for used cars decreases after the price of a new car falls, used cars and new cars are
A) complementary goods.
B) normal goods.
C) substitute goods.
D) inferior goods.
E) The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.
4) Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
A) the demand for hot dog buns will increase.
B) the demand for hot dog buns will decrease.
C) the quantity demanded of hotdogs will decrease.
D) the quantity demanded of hot dog buns will increase.
E) the demand for hot dogs will increase.
5) Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The quantity of tacos demanded increases and the quantity of pizza demanded decreases.
B) The demand for each decreases because both are normal goods.
C) The quantity of pizza demanded decreases and the demand for tacos increases.
D) The demand for pizzas decreases, and the demand for tacos increases.
E) The demand for both goods decreases.
6) If the demand for a good increases when people\'s incomes increase,
A) the good is a substitute good for an inferior good.
B) the good\'s demand curve must be slope upward.
C) the good is an inferior good.
D) the good is a normal good.
E) the law of demand is violated.
7) Ramen noodles are a staple food item for many college students. Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly. In this case, Ramen noodles are
A) a normal good.
B) a substitute good.
C) a complement for higher income people.
D) an inferior good.
E) None of the above answers is correct.
8) Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers?
A) an increase in the number of firms producing personal computer
B) a rise the price of a personal computer
C) a change in the expected future price of a personal computer.
D) an advance in the technology used to produce personal computers
E) a fall in the cost of the components used to assemble personal computers
9) Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?
A) The supply of cheese decreases.
B) The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese.
C) The supply of cheese stays the same and there is no change in the quantity supplied of cheese.
D) The supply of cheese increases.
E) The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.
10) A rise in the price of a substitute in production for a good leads to
A) no change in either the supply or the quantity supplied of the good.
B) a decrease in the quantity of that good supplied.
C) a decrease in the supply of that good.
D) no change in the supply of that good; instead there is a change in the quantity supplied.
E) an increase in the supply of that good.

11) If the automobile worker\'s union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles?
A) The quantity supplied decreases.
B) The supply decreases.
C) The quantity supplied increases.
D) The supply increases.
E) Both answers B and D are correct.

Solution

1. The law of demand states that there is negative relationship between price and quantity. If the university of Minnesota increases tution, all other things being equal the quantity of classes demanded will decrease at the university of Minnesota.

Answer-option D

2. Change in price of the good doesn\'t shift the demand curve as it\'s not determinant of demand curve. Instead, change in price causes movement along the demand curve.

Answer- option B

3. After the price of a new car fall, its quantity Demanded increases and demand for used car decreases. It means with decline in price of new car, demand shifts from used car to new car. Therefore, these two are substitute goods.

Answer- option C

4. If hot dogs and hot dog buns are complement, it means these two are purchased together. If the price of a hot dog falls, quantity demand for hot dog increases. Therefore, demand for hot dog buns will also increase as these two goods are purchased together.

Answer-option A