19 Suppose the market for used textbooks is at an equilibriu

19 Suppose the market for used textbooks is at an equilibrium, and then there is a decrease in demand. According to supply and demand logic, what will happen to the price and quantity of used textbooks

Select one:

a. Price increase, quantity increase

b. Price increase, quantity decrease

c. Price decrease, quantity increase

d. Price decrease, quantity decrease

Question 20

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Select one:

a. decrease in the supply of wine, increasing price.

b. decrease in the demand for wine, decreasing price.

c. increase in the demand for wine, increasing price.

d. increase in the supply of wine, decreasing price.

Question 21

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21 In the supply and demand graph the equilibrium is where the demand curve crosses the x intercept.

Select one:

True

False

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22 The price of gasoline decreased dramatically in the summer of 2009. One likely reason for this change is:

Select one:

a. strong economic growth in China that increased the demand for automobiles.

b. a decrease in the demand for gasoline brought on by the recession.

c. riots in the Middle East that disrupted oil shipments.

d. a shortage in the supply of oil worldwide.

Question 23

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23 When there is a recession, the price of oil tends to fall because:

Select one:

a. the supply of oil increases during a recession, due to technological change.

b. incomes fall during a recession, and oil is a normal good.

c. people drive more during recessions while looking for employment.

d. the prices of substitutes for oil rise during recessions.

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24 Which statement is true. In the aggregate sense:

Select one:

a. Total spending + total income will equal the value of the output

b. Total income will be larger than total spending

c. Total spending will equal total income

d. Total spending will be larger than total income

Solution

19. D. The demand curve shifts to the left and supply curve remains the same. The equilibrium price and quantity will fall.

20. A. Decrease in the supply. Supply curve will shift to the left.

21. False. Equilibrium point is the intersection of the demand and supply curve. The point where demand curve crosses the X intercept tells us how much is demanded when price =0.

22. b. The demand curve will shift to the left and supply curve remains the same.