ECON101: Principles of Microeconomics

Question 1

Try graphing each of these situations to determine if they cause a shift in demand, quantity demanded, supply, or quantity supplied.

The cost of rubber used to produce tires falls by 20%. This will result in ________ for tires.

• an increase in the quantity demanded
• a decrease in demand
  
• an increase in demand
  

Question 2

A recent study reveals that raisins are a natural aphrodisiac. This will likely result in ________ for raisins.

• only a decrease in the quantity demanded
• only an increase in the quantity demanded
  
• an increase in demand
  

Question 3

An unexpected government tax rebate has given all the residents in your town $1,000 of extra income. This will result in ________ for goods at the local retail store.

• an increase in the quantity supplied
• anly an increase in quantity demanded
  
• an increase in supply
  

Question 4

A recent pork shortage has increased its price by 25% on the world market. As an avid fan of hot dogs you would expect ________.

• a decrease in demand
• anly a decrease in the quantity supplied
  
• a decrease in supply