ECON 705 Module 1 Exam prep 2023 With Revised Answered Answers.

ECON 705 Module 1 Exam prep 2023 With Revised Answered Answers. 1. The laws of demand implies that, other things remaining the same: a. As the price of cheeseburgers rises, the quantity demanded will decrease Price = demand 2. A substitute is a good: a. That can be used in place of another good. 3. The demand for a good increases when the price of a substitute _______ and also increases when the price of a compliment _______. a. Rises; falls Demand of a good when the price of a substitute Demand of a good when the price of a compliment 4. Which of the following would NOT shift the demand curve for turkey? a. A decrease in the price of ham ( price of a substitute = demand for turkey) b. An increase in income c. A change in tastes for turkey d. A change in the price of a turkey 5. The quantity of a good is: a. The amount that the producers are planning to sell at a particular price during a given time period. 6. An increase in the number of fast-food restaurants: a. Increases the supply of fast-food meals. ( in # of stores = in quantity supplied) 7. Let Qd stand for quantity demanded, Qs stand for quantity supplied, and P stand for Price. If Qd = 20 – 2P and Qs = 5 + 3P, then the equilibrium price is: a. $3 8. Let Qd = quantity demanded; Qs = quantity supplied; P = Price If Qd = 20 – 2P and Qs = 5 + 3P , What is the equilibrium quantity? a. 14 9. A rise in the price of a good causes producers more of the good. This statement illustrates: a. A change in supply 10. Noodles is an inferior good. Hence, a decrease in people’s income: a. Shifts the demand curve for noodles rightward 11. State the law of demand: a. The law of demand states that the quantity demanded of a good or service is inversely related to its price, ceteris paribus. Price of a good , the quantity demanded 12. The law of supply is: a. The law of supply states that the quantity supplied of a good or service is directly related to a change in its market price, ceteris paribus. Quantity supplies as Price 13. What is considered a “normal” good by economists? a. Demand for normal goods increases when income increases. Demand curve shifts right. Demand for goods when income , Demand curve shifts Right Demand for normal goods decreases when income decreases. Demand curve shifts left. Demand for goods when income , Demand curve shifts Left 14. What is the difference between the quantity demanded and demand curve? a. Change in the quantity demanded for a good (causes a movement along a demand curve) and the change in a good’s demand (causes the entire demand curve to shift) Change in good’s Quantity = movement along the Demand curve Change in a good’s demand = shift in the demand curve 15. What is the reason why the Quantity demanded of a good increase when its price falls? a. When price falls that increases the real income of buyers and enables them to buy more. 16. Define surplus and shortage. a. Surplus: means that there is more quantity supply than quantity demanded b. Shortage: means that the quantity demanded is less than the quantity supplied.