In each of the following statements, find the correct choice:
1 In each of the following, what is the expected change in the demand curve for pizza?
a An increase in the price of soft drinks or beverages in general.
b The discovery that eating mozzarella cheese will extend one's life expectancy.
c A medical report shows new evidence of the dangers of eating canned vegetables.
2 Which of the following is not a factor which will shift the demand curve for some product?
a An increase in the price of a substitute good.
b An increase in the price of the good itself.
c An increase in consumer income.
d An expectation of a future price decline.
3 Which of the following would not shift the supply of Buffalo Burgers?
a An increase in the price of buffalo meat.
b An increase in the price of Buffalo Burgers.
c An increase in the interest rate offered on money market mutual funds.
d An increase in the incidence of Mad Buffalo Disease.
4 If a price ceiling is the maximum legal price that may be charged for some good or service, and a price floor is the minimum legal price that may be charged for some good or service, which of the following circumstances would result in a shortage?
a The government establishes a price support (floor) for milk at a price of $2.00 per gallon, while the market equilibrium price would be (is) $1.75.
b The government establishes a price support (floor) for wheat at a price of $12.00 per bushel, while the equilibrium price would be (is) $14.00.
c New York City local government establishes a rent control (price ceiling) on apartments in a certain section of the city at $1,200 per month, while the equilibrium price for the apartments would be (is) $1,150 per month.
d None of the above situations would result in a shortage.
5 Consider the market for flat screen television sets. Suppose that the demand for flat screen TVs has increased as people desire the improved picture quality offered by these TVs. At the same time,...