ECON 705 PRACTICE QUIZ| VERIFIED SOLUTION

ECON 705 PRACTICE QUIZIf the price of gasoline increased, what might you expect to happen? Select one: a. People would increase their use of public transportation. b. Demand for ethanol and alternative fuels would increase. c. People would reduce the amount of driving they did. d. All of these are likely to happen. A positive slope parameter for the price variable means that quantity demanded will always increase whenever price changes (increases or decreases). Select one: True False A negative parameter on the income variable means that quantity demanded will increase when incomes fall. Select one: True False The slope of the demand curve demonstrates that the law of demand is true since, as price rises, the quantity demanded will Select one: a. not change. b. decrease. c. increase. Cheaper raw materials will tend to Select one: a. increase costs and thus reduce supply. b. lower costs and thus reduce supply. c. lower costs and thus increase supply. d. increase costs and thus increase supply.