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1. If CD's and MP3's are substitute goods and the price of MP3's rises (be careful because we don't know why the price of MP3's rises):
B) the demand curve for CD's will shift to the right and their price rise
When the price of a substitute rises, consumers switch to the other good, which shifts its demand curve outward. This intersects their supply curve at a higher price.
2. Which of the following will not shift the demand curve of a normal good to the right?
E) a decrease in the price of the product
The relationship between price and quantity demanded is already reflected in the demand curve.
3. The economic result(s) of raising the minimum wage above the market wage is
E) some people will lose their jobs, but others will make more money
Whenever a price floor is established, the quantity supplied will be less than the quantity demanded. In this case, employers will cut back on the number of jobs they provide, although those jobs that remain will pay more.
4. Price per ear of corn Quantity of corn per week
$ .50 10
The above table represents:
Because the quantity increases with price, this is ...
The true cost of the good, market forces, externalities, and antitrust law.