d. a change in the market price of the good 2-8 When the average price of videocassette recorders (VCRs) fall, the result is a. an increase in supply of VCRs. b. an increase in the quantity of VCRs supplied. c. an increase in the quantity of VCRs demanded. d. a decrease in the quantity of VCRs demanded. 2-9 Use the following general linear demand relation to answer the following question: where M is income andis the price of a related good, R. From this relation it is apparent that the good is: an inferior good a substitute for good R a normal good a complement for good R both c and d 2-10 Use the following general linear demand relation to answer the following question: where M is income andis the price of a related good, R. If M = $15,000 and = $20, the demand function is a. . b. . . . . 2-11 Use the following general linear demand relation to answer the following question: where M is income andis the price of a related good, R. If M = $15,000 and = $20 and the supply function is , equilibrium price and quantity are, respectively, P = $55 and Q = 195. P = $6 and Q = 38. P = $12 and Q = 200. P = $50 and Q = 170. P = $40 and Q = 250.
a. price will decrease, quantity will decrease b. will decrease, quantity will increase c. price will increase, quantity will decrease d. price will increase, quantity will increase e. The change in equilibrium price and quantity is indeterminate. 2-22 Suppose that the market for engagement rings is in equilibrium. Then political unrest in South Africa shuts down the diamond mines there. South Africa is the world's primary supplier of diamonds. What will happen? a. The equilibrium quantity of engagement rings will decrease. b. The equilibrium price of engagement rings will decrease. c. The demand for engagement rings will decrease. d. The supply of engagement rings will increase. 2-23 So long as the actual market price exceeds the equilibrium market price, there will be a. downward pressure on the price. b. upward pressure on the price. c. excess demand. d. a shortage. 2-24 In which of the following cases will the effect on equilibrium output be indeterminate (i.e., depend on the magnitudes of the shifts in supply and demand)? a. Demand increases and supply increases b. Demand decreases and supply decreases c. Demand decreases and supply increases d. Demand remains constant and supply increases 2-25 Increases in the wage rates of coal miners and decreases in the price of natural gas would cause the price of coal to a. rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal fall. b. rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal would increase. c. rise, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes. d. rise, but the equilibrium quantity of coal would fall. e. fall, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes. 2-26 In the above figure, the equilibrium price and quantity are a. P = $6 and Q = 800. b. P = $4 and Q = 300. c. P = $4 and Q = 400. d. P = $6 and Q = 300. e. P = $7 and Q = 800.
a. b none of the above 2-37 Use the following general linear demand relation to answer the following question where P is the price of good X, M is income, and is the price of a related good, R. From the demand function it is apparent that related good R is a. normal. inferior. a substitute for good X . a complement for good X. 2-38 Use the following general linear demand relation to answer the following question P is the price of good X, M is income, and is the price of a related good, R. If M = $50,000 and = $10 and the supply function is , market price and output are, respectively, a. P = $12 and Q = 150. b. P = $10 and Q = 200. P = $12 and Q = 200. P = $15 and Q = 175. P = $15 and Q = 225. 2-39 Use the following general linear demand relation to answer the following question where P is the price of good X, M is income, and is the price of a related good, R. If income increases to $100,000 and the price of the related good is now $20, what is the demand function? a. b. none of the above 2-40 Use the following general linear demand relation to answer the following question P is the price of good X, M is income, and is the price of a related good, R. Income is $100,000, the price of the related good is $20, and the supply function is Qs = 150 + 5P. What is the equilibrium price? $30 $25