Kills High Yield Hybrid Economics Exam Continuati
. As a household’s average income rises, we usually expect:A. the proportion of its income allocated to food to increase, as food is a necessity.B. its expenditure habits to remain constant, as income changes have no effect on demand.C. its demand for goods to increase because the price of these goods will decline.D. its demand for luxuries to increase.
7. A fall in the price of raw milk, used in the production of ice cream, will:A. decrease the supply of ice cream, causing the supply curve of ice cream to shift to the left.B. increase the supply of ice cream, causing the supply curve of ice cream to shift to the right.C. have no effect on the supply of ice cream at all.D. have no effect on the supply curve of ice cream, but will cause a downward movement along the supply curve of ice cream.
8. An increase in the price of cheese, all else equal, is likely to have all of the following effects except a:A. decrease in the quantity demanded of cheese.B. decrease in the supply of pizza.C. increase in demand for peanut butter (a substitute good).D. decrease in the demand for apple pie (a complimentary good).E. all of the above will occur.
9. Which of the following will cause an increase in the supply of U.S. wheat?A. unionization of farm labor.B. the introduction into the U.S. of a disease which kills high yield hybrid wheat strains but NOT low yield strains.C. A temperance movement in the U.S. gains popular acceptance and demand for beer and barley (an input in beer production) fall. (Assume wheat and barley are substitutes in production.)D. “natural” grains and cereals (including wheat) become more popular in the U.S.E. none of the above.
10. Legalizing the use of addicting drugs would have all of the following effects except:A. the supply of addicting drugs would increase.B. the demand for addicting drugs would increase.C. in the long-run, price would fall while quantity exchanged would rise.D. the quality of addicting drugs being sold in the legalized market would be expected to be better than in the illegal market.E. all of the above.