Question

19. Other things equal, which of the following might shift the demand curve for gasoline to the right?
A. the discovery of vast new coal reserves in West Virginia

B. the development of a low-cost electric automobile
C. an increase in the price of train and air transportation
D. a large decline in the price of automobiles

20. When the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes:
A. an inferior good.
B. the rationing function of prices.
C. the substitution effect.
D. the income effect.

21. Which of the following would not shift the demand curve for beef?
A. a widely publicized study that indicates beef increases one's cholesterol
B. a reduction in the price of cattle feed
C. an effective advertising campaign by pork producers
D. a change in the incomes of beef consumers

22. Suppose an excise tax is imposed on product X. We would expect this tax to:
A. increase the demand for complementary good Y and decrease the demand for substitute product Z.
B. decrease the demand for complementary good Y and increase the demand for substitute product Z.
C. increase the demands for both complementary good Y and substitute product Z.
D. decrease the demands for both complementary good Y and substitute product Z.

23. Assume product A is an input in the production of product B. In turn product B is a complement to product C. We can expect a decrease in the price of A to:
A. increase the supply of B and increase the demand for C.
B. decrease the supply of B and increase the demand for C.
C. decrease the supply of B and decrease the demand for C.
D. increase the supply of B and decrease the demand for C.

24. The demand curve for a product might shift as the result of a change in:
A. consumer tastes.
B. consumer incomes.
C. the prices of related goods.
D. all of these.