California State University, Sacramento

ECON 1A

Quiz 3

Question 1)When economists explain the relationship between the price of gasoline and the quantity of gasoline that consumers will buy, the ceteris paribus assumption implies that:

Question 2

If automobiles are a normal good and the price of automobiles increases, then holding all else constant, the

Question 3

Question 4

Assume that the graphs in the figure repre­ sent the demand and supply curves for al­ monds. Which panel best describes what

happens in this market when there is an increase in the productivity of almond harvesters?

 Question 5

Assume that the demand and supply curves in this figure represent the demand and supply curves for rice. What happens in this market if buyers expect the price of rice to fall?

Question 6

Assume that the graphs in this figure represent the demand and supply curves for used clothing,

an inferior good. Which panel best describes what happens in this market as a result in a de­ crease in consumer incomes?

Question 7

Suppose that strawberries and blueberries are substitutes. If the price of blueberries de­ creases, which panel best describes what happens in the market for strawberries?

Question 8

Because of a drought, the price of water increases dramatically. Note that almond producers in

California use 10 percent of the state's water supply. Assume that the graphs in this figure rep­

resent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the price of water?

Question 9

In which of the following cases will the effect on equilibrium output be indeterminate (i.e., de-

pend on the relative magnitudes of the shifts in supply and demand)?

Question 10

Use the following general linear demand function to answer the following question:

Qd=100-5P+0.004Y-5PR

where Qd is the quantity demanded of good X, P is the price of good X, Y is income, and PR is the price of a related good R. What is the demand function when Y = $40,000 and PR = $20.

Question 11

Using the linear demand function given in Question 11 above, it is apparent that the related good R is:

Question 12

Using the linear demand function from Question 11, it is apparent that good X is:

Question 13

Using the linear demand curve from Question 11, if Y=$40,000 and PR = $20, and if the supply function is Qs = 85+10P, then the equilibrium market price and quantity are, respectively:

Question 14

Suppose that demand for a particular good has a low price elasticity of demand (inelastic). If the price of the good falls, then, all else equal, the total revenue in this market:

Question 15