The law of supply states that as the price of a good rises, the quantity supplied decreases. true false The law of demand states that as the price of a good rises, the quantity demanded decreases. true false A decrease in consumer income shifts the demand curve leftward. true false A rise in the price of chicken feed shifts the supply curve of chickens leftward. true false If both the demand and supply curves shift equal distances rightward, the equilibrium price rises. true false A rise in the price of popcorn shifts the demand curve for popcorn rightward. true false New technology for manufacturing computer chips is developed. The new technology will contribute to cheaper production of computer chips contribute to a decrease in the supply of computer chips not affect the supply of computer chips New cars are a normal good. Suppose the economy enters a period of strong economic expansion so that consumer incomes increase substantially. What will happen to the demand for new cars? It will increase because a rise in overall income produces an increase in demand for normal goods. It will stay the same because people will increase the purchase of other goods. It will decrease because a rise in overall income produces a decrease in demand for normal goods. A rise in the price of a game of bowling will decrease the demand for bowling balls increase the demand for bowling balls result in a lot more people bowling decrease the demand for cars Gruel is an inferior good. Hence, an increase in consumer income decreases the supply of gruel increases the supply of gruel decreases the demand for gruel increases the demand for gruel It costs Balls-R-Us, a supplier of soccer balls, $3.00 to produce each soccer ball and $300.00 to make one hundred soccer balls. It is able to sell these soccer balls for $10.00 each. What is the marginal cost of producing soccer balls? $10.00 $300.00 $3.00 $1.00 Since prices don’t favor producers or consumers, they are described as fixed neutral flexible biased At any given price, a surplus of oranges will occur when the quantity demanded is more than the quantity supplied the quantity demanded is the same as the quantity supplied the quantity supplied is less than the quantity demanded the quantity supplied is greater than the quantity demanded A price compromise between buyer and seller is known as a(n) equilibrium price target price deficiency payment adjustment price The government sets a price ceiling on pizza that is below the equilibrium price of pizza, causing a shortage of pizza a surplus of pizza no shortage of pizza none of the above In an unregulated market, which of the following will occur as a result of sudden destruction of a large proportion of the supply of housing? (Hint: This will cause a decrease in the supply of housing.) Drawing a diagram will help you. a decrease in demand for rental housing a surplus of rental housing higher rental prices a decrease in rental prices